Fuel Cell Race Heats Up for Hybrid Vehicles: United Technologies Powers Ahead

Dow Jones Industrial’s component and multinational conglomerate United Technologies (UTX NYSE) offers investors diversification, as well as a solid track record of growth. But for those seeking a solid green investment pick when it comes to fuel cell technology, pay close attention to what one of their units, UTC Power, has accomplished in the race to make the hybrid vehicle market a commercially accepted reality in the very near future.

The company has already made great strides by supplying major auto makers with fuel cell technology for their hybrid prototypes. While these models are not being mass produced just yet, the company has an appealing mix of clients, including BMW, a luxury automaker, Nissan and Hyundai, the two top auto selling behemoths, and in the larger vehicle segment, UTX, which supplies fuel cell powered buses in the state of California.

Now while the hydrogen fuel cell idea has some infrastructure issues such as the scarce availability of hydrogen filling stations, the technology has advantages over other alternative energy solutions. For one, and probably most importantly, fuel cell technology is the nearest-term solution to providing energy production in automobiles with virtually no carbon dioxide emissions.

Also, people on the ethanol bandwagon should note that high volume ethanol production puts upward pressure on food prices because of the amount of crops that will have to be supplied to produce the fuel. I don’t believe that it is worth the cost, unlike fuel cell technology which does not have this problem.

Beyond the exciting pace of development in this arena, United Technologies recently reported third quarter earnings of $1.2 billion dollars, up 20 percent over the prior period and well ahead of Wall St. expectations. Revenues for the quarter were just over $13 billion.

Performance like this is why they are in the illustrious Dow 30 stocks. Add to that an ambitious recipe to help solve the world’s power demands absent of oil and the other dirty alternatives, and this company has earned the right to be one of my top holdings as a real time play on green automobile technology.

The stock pulled back with the recent market sell-off two days ago, but that’s what makes it attractive to me at these levels. It closed yesterday at $77.43 per share.

Visit United Technologies’ website for a look at the company’s environmental objectives and currently deployed power project profiles.

Click here for a list of fuel cell vehicles in production, or here for an organized list of other alternative energy investment stocks broken down by category.

Disclaimer: I do not own the stock yet, but I love it at these levels. I do not own a hybrid vehicle.

Fuel Cells
Photo:gmeurope, Creative Commons, Flickr