5. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 50
Shell plc (NYSE:SHEL), headquartered in London, U.K., is a global energy and petrochemical company. Within its Renewables and Energy Solutions segment, the company produces and sells hydrogen as a part of its mix of energy production offerings, alongside its focus on wind, solar, and electric vehicle charging services.
By Q1 2024, the company’s CrossWind project, which is an offshore wind project in the Netherlands, and Madison Fields project, which is a solar energy project in the U.S., reached their commercial operation, taking the company’s renewable power generation capacity to operation from 2.5GW in Q4 2023 to 3.2GW in Q1 2024. On an overall basis, the company’s adjusted earnings increased by approximately 6% from $7.3 billion in the previous quarter to $7.7 billion, while the EBITDA increased by 14.6% to $18.7 billion! This occurred on the back of a $1.6 billion increase in adjusted earnings in the company’s Chemicals & Products segment, which saw an increase in both the refinery processing intake and chemical sales volume.
However, the company’s revenue in the quarter fell by 17% on a YoY basis to $72.5 billion, amidst fluctuations in the oil prices, which leaves doubts on the minds of investors; however, what’s relieving is that the company still managed to maintain a healthy cash position as its operating cash flows amounted to $13.3 billion in the quarter, and shareholders’ returns amounted to $5 billion through dividends and share repurchases.
Shell plc (NYSE:SHEL), in addition to its petrochemical operations, is making strides in the alternative energy sources market, specifically in the hydrogen market. In March 2024, the company announced two hydrogen initiatives. The first initiative is the Holland Hydrogen 1 (HH1) project in the Port of Rotterdam, Netherlands, which the company will be initiating with Worley, an engineering consultancy company. The project is about a 200 MW electrolyzer, getting the power from an offshore wind farm, and will in return, produce about 60,000 kg of hydrogen per day, which will help supply power to over 2,300 trucks and also help decarbonize Shell’s Energy & Chemicals Park in Rotterdam. The second initiative involves Shell partnering with Bloom Energy in pursuit of exploring decarbonization solutions, by making use of Bloom’s hydrogen electrolyzer technology. By working together, both aim to create large-scale solid oxide electrolyzer (SOEC) systems, which will be responsible for the production of hydrogen that will be utilized across Shell’s operations. Thus, these initiatives are footprints of Shell’s commitment to leaping in the hydrogen market that is expected to see a demand boom in the coming time.
Thus, with the company’s goal to decarbonize fully by 2050, along with the relevant initiatives taken by the company in the field of renewables, and with the company expecting a 50% surge in its LNG business demand by 2040, accompanied by robust operational performance despite fluctuating commodities prices, the stock is receiving optimistic response from the investors, as evident from the fact that the stock has risen approximately 14% in the past year, with further growth expected as the analysts have set the target price at $86 from its current price of $71.3, translating to an upside of a cool 20.6%. As such, four hedge fund holders have recently taken up a stake in the stock, taking the total tally to 40, worth $5.5 billion, leading the stock all the way to our list of 10 Best Hydrogen and Fuel Cell Stocks to Buy.
