Latest news with #AirProducts&Chemicals
Mint
4 days ago
- Business
- Mint
How hydrogen, the fuel of the future, got bogged down in the bayou
The chief executive of Air Products & Chemicals visited the Louisiana governor's mansion in 2021 to unveil the industrial-gases supplier's biggest-ever investment: a $4.5 billion facility that would make the fuel of the future by the Mississippi River. Seifi Ghasemi's plan was to produce hydrogen from natural gas, capture the carbon dioxide, pipe it through wildlife-rich wetland and sequester it below picturesque Lake Maurepas. Ghasemi had a grand vision. Beyond its regular uses in oil refining and ammonia for fertilizers, hydrogen would power buses, trucks, trains, ships, planes and steel mills after the plant opened in 2026, he predicted. Nearly five years after his visit, the project's price tag has swelled to $8 billion, the construction timeline has slipped and the company is still seeking customers. Ghasemi has been ousted as CEO, and his successor is reining in spending. The idea that low-carbon hydrogen could replace oil and gas in many applications was taking off when Ghasemi visited Baton Rouge, La., as politicians and executives were vowing to slash emissions. But sentiment has since soured. This fossil-fuel alternative remains stubbornly expensive, and governments in the U.S. and elsewhere have shied away from putting their weight behind it. The tax bill approved by House Republicans would cut off hydrogen production tax credits, part of an effort to undo many Biden-era climate programs and reduce funding for wind and solar power. President Trump, meanwhile, has cast himself as the savior of U.S. oil and gas. Companies that once looked like early movers—such as the steel producer ArcelorMittal and Airbus, the plane maker—have delayed plans to use hydrogen. 'The main challenge right now is finding buyers," said Martin Tengler, a BloombergNEF analyst who estimates that just 4% of the announced low-carbon hydrogen production capacity had secured funding as of 2024. Hydrogen hype isn't new. High oil prices spurred an earlier wave in the 1970s. But high costs and impracticality—hydrogen is explosive and can leak through gold—meant that the plans fizzled. When climate worries revived the dream, few dove in more eagerly than Ghasemi. Air Products stood out for starting projects before it had customers and embracing technical challenges that rivals handed off to experienced partners. 'If you don't take the risk, you always lose," he said in a 2017 interview. Today, most hydrogen is extracted from natural gas, a process that adds carbon dioxide to the atmosphere. There are two main alternative methods—and Air Products pursued both. The Louisiana plant intends to make blue hydrogen. It is produced the traditional way, but the carbon is captured and kept out of the atmosphere—forever, if possible. Green hydrogen is made by splitting water into oxygen and hydrogen using renewable electricity. Blue hydrogen is more controversial. Carbon-capture facilities often catch less pollution than hoped—Air Products says it will capture more than 95%—and using natural gas ties this ostensible climate solution to a source of emissions. The House tax bill would eliminate tax credits for hydrogen production, which would kill most green-hydrogen projects, Tengler expects, but not the carbon-capture credits that benefit blue-hydrogen producers. 'It was a feeding frenzy" of a wave of blue-hydrogen projects that were drawn to Louisiana by tax credits and rocks suitable for storing carbon dioxide, said Corinne Van Dalen, a lawyer at the nonprofit Earthjustice. Air Products' ventures, from the bayou to a mostly unbuilt megacity in the Middle East, track hydrogen's growing pains. At Neom, Saudi Arabia's under-construction desert metropolis, Air Products has an unusual double role in the largest green-hydrogen project being built. As well as being a shareholder, the company committed to buy the hydrogen from the plant in the form of ammonia, which is easier to export. That puts the company on the hook to find customers. Air Products has announced just one: TotalEnergies, which plans to use green hydrogen in European refineries. Eduardo Menezes, who became Air Products' chief executive in February, said he is talking to other potential buyers. Saudi Arabia has the abundant sunshine, wind, space and labor needed to make relatively low-cost green hydrogen, but 'it's still a premium product," Menezes said. The plant is on course to start production in 2027, but Air Products now plans to delay its investment in facilities in Europe designed to handle hydrogen from Neom. More than 2,000 miles away, uncertain demand is slowing down a plan to turn the Dutch port of Rotterdam into Europe's hydrogen hub. Three years ago, Air Products and the trading group Gunvor said they would build a terminal to import ammonia and convert it back into hydrogen. It was one of several planned at the port, which also set aside space for green-hydrogen factories. Most of those projects, including Air Products', still await investors' go-ahead. A hydrogen pipeline network has been delayed. Shell is building a green-hydrogen factory, but BP recently pulled out of a similar effort, according to a spokesman for a former partner, HyCC. BP has been scaling back its low-carbon spending. 'We have to be realistic about the time frame," said Boudewijn Siemons, the chief executive of the Port of Rotterdam Authority. 'A couple of years ago, there was no steel in the ground, and there is now." Progress is being slowed by Europe's high electricity prices, which increase the cost of producing green hydrogen, and regulatory uncertainty. The European Union has set mandates that will require the use of green hydrogen in refining and other sectors. But Tengler at BloombergNEF said they aren't nearly stringent enough to fulfill the bloc's target of consuming 20 million tons of green hydrogen a year by 2030. Some hydrogen applications are losing to other fossil-fuel alternatives. Hydrogen buses have been left behind by electric vehicles. Other applications, such as hydrogen-based steelmaking and shipping fuel, are moving forward, but slowly. 'If it was easy it would be done a long time ago," Menezes said. Menezes pulled out of a plan to produce hydrogen-based jet fuel in Paramount, Calif., and a proposed green-hydrogen plant in Massena, N.Y. The company wrote off $2.9 billion for those projects and other cost cutting. In Louisiana, Air Products is trying to limit its exposure. Its risky strategy was criticized by activist investors who began calling for a change of course last year. The company is now seeking buyers for the ammonia-production and carbon-sequestration parts of the project, which could reduce its share of the cost by as much as $3 billion, Menezes said. Work won't continue until customers are found. Van Dalen, the environmental lawyer, would be pleased if Air Products' vision for the bayou crumbles. The hydrogen-production site is near a school, and the 40-mile carbon-dioxide pipeline would pass through rare wetland occupied by ospreys, largemouth bass and migratory birds. At Lake Maurepas, the plan to sequester carbon dioxide troubles some nature lovers and crabbers. Air Products says it consulted with government agencies on its project and is funding environmental-monitoring efforts. While Menezes looks for customers, Ghasemi's legacy in Louisiana can be seen in projects funded through Air Products' $1 million-a-year plan to secure communities' support, such as $200,000 for Lake Maurepas field trips and $50,000 for neutering feral cats.
Yahoo
01-04-2025
- Business
- Yahoo
All It Takes Is $4,000 Invested in Each of These 3 Dividend Stocks to Help Generate Over $300 in Passive Income per Year
There are plenty of ways to generate passive income, such as bonds, Treasury notes, high-yield savings accounts, and even stocks. Dividend stocks can be especially effective over the long term because their passive income element complements the potential gains from the investment growing in value over time. Whereas other vehicles are entirely centered around passive income. Lockheed Martin (NYSE: LMT), Air Products & Chemicals (NYSE: APD), and FedEx (NYSE: FDX) are three industry-leading companies with growing dividends. By investing $4,000 into each stock, you can expect to earn at least $300 in total passive income per year. Here's why all three dividend stocks are worth buying now. Lee Samaha (Lockheed Martin): While the long-term outlook for defense spending is uncertain, the medium-term environment is very positive. The need to replenish equipment used in conflicts in Europe and the Middle East, the likelihood of NATO members fulfilling their spending commitments, and the heightened geopolitical tension create demand for defense equipment. Indeed, Lockheed Martin ended 2024 with a record backlog of $176 billion -- a figure representing 2.4 years of sales, based on the midpoint of management's 2025 sales guidance. Moreover, given that the company had a book-to-bill ratio (a metric that measures bookings over revenue) of 1.2 times in 2024, the defense company has excellent momentum with orders. CEO Jim Taiclet noted that "each and every one of our four business areas saw backlog growth and ended the year with a book-to-bill ratio of greater than 1. We fully expect these positive trends to continue in our 2025 outlook, with mid-single-digit growth in sales." In addition, management's guidance for 2025 implies it will easily cover its dividend per share ($13.20) with earnings per share (guidance of $27-$27.30) and free cash flow (guidance of $6.7 billion compared to a dividend costing $3 billion in 2024). Indeed, that's been the case with Lockheed Martin for a while. Lockheed Martin's customers are reliable (governments), defense spending holds up well in a slowdown, and the current environment remains favorable. Everything points to the company being a reliable stock for passive income-seeking investors over the next few years. Scott Levine (Air Products & Chemicals): Whether you're a younger investor looking to grow dependable dividend income over decades, a more experienced investor interested in procuring more passive income in retirement, or you're somewhere in between, industrial gas supplier Air Products & Chemicals demands consideration. The company has logged more than four decades of boosting its payout to shareholders, and its stock currently offers a 2.4% forward dividend yield. Supplying and delivering industrial gases is not something done easily -- especially on the scale that Air Products operates. The company's infrastructure includes 1,800 miles of industrial gas pipeline as well as over 750 production facilities. This high barrier to entry, consequently, has helped Air Products remain one of the leading industrial gas suppliers, a position that it's not likely to cede anytime soon. With regards to hydrogen production, in particular, Air Products has emerged as a leader, a position that it's fortifying with the development of various projects such as the NEOM green hydrogen project in Saudi Arabia and a blue hydrogen production plant in Louisiana. Hiking its dividend higher for 43 consecutive years, Air Products has demonstrated a steadfast commitment to shareholders. Unlike companies that nudge their dividends nominally higher, Air Products has boosted its payout at an approximately 8% compound annual growth rate from 2014 to 2025. And it's not as if the company's sacrificing its financial health in doing so. Over the past five years, Air Products has averaged a 61% payout ratio. Changing hands at 17 times trailing earnings, Air Products is trading at a discount to its historic P/E of 27. If you're passionate about passive income, today's a great time to power your portfolio with Air Products stock. Daniel Foelber (FedEx): FedEx fell to a 52-week low on March 21 after reporting weak third-quarter fiscal 2025 results and slashing its full-year guidance. The package delivery giant reported adjusted revenue of $22.2 billion -- up just 2.3% compared to the same quarter last fiscal year. Operating income was up 11% year over year. The real concern was guidance -- which calls for a year-over-year decrease in revenue and adjusted earnings per share of $18 to $18.60 -- below the prior forecast of $19 to $20 per share. In June 2024, when FedEx reported full-year fiscal 2024 results, it forecasted $20 to $22 in adjusted fiscal 2025 EPS. Wall Street hates uncertainty. So when a company's performance deteriorates rapidly and it slashes guidance over and over again, the stock price will probably reflect investor frustrations. Another concern is tariffs. Transportation companies like FedEx benefit from economic growth and the global exchange of goods. Tariffs can make it less attractive for countries to trade with the U.S. and increase input costs for U.S. companies -- which could be a negative for FedEx. There's also the ongoing issue of high interest rates, which increase borrowing costs and slow economic growth. All told, the near-term setup for FedEx isn't great, which is probably why the stock has been sliding lately -- now down over 18% year to date at the time of this writing. FedEx looks like a great buy for long-term investors willing to look past the near-term headlines. Based on the midpoint of its updated adjusted earnings guidance, the company has a price-to-earnings ratio of just 12.6. FedEx's yield is now 2.3% -- which isn't high-yield territory, but it is a solid stream of passive income. For context, well-known dividend stocks like Procter & Gamble and McDonald's feature yields of 2.4% and 2.3%, respectively. So FedEx is in that same range. Even during a slowdown, FedEx can easily afford to pay and grow its dividend. FedEx's dividend is just $5.52 per share -- less than a third of its earnings guidance -- giving the company an ultra-safe payout ratio. Add it all up, and FedEx is an excellent value stock to buy and hold if you have at least a three to five-year investing time horizon. Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $284,402!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $41,312!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $503,617!* Right now, we're issuing 'Double Down' alerts for three incredible companies, and there may not be another chance like this anytime soon.*Stock Advisor returns as of March 24, 2025 Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends FedEx. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy. All It Takes Is $4,000 Invested in Each of These 3 Dividend Stocks to Help Generate Over $300 in Passive Income per Year was originally published by The Motley Fool Sign in to access your portfolio
