FuelCell Energy (FCEL) or Plug Power (PLUG): The Best Small Cap Fuel Cell Stock?

Despite horrendous losses for investors over the long term, small cap fuel cell stocks FuelCell Energy Inc (NASDAQ: FCEL) and Plug Power Inc (NASDAQ: PLUG) have both made gains this year. However, which is the better small cap fuel cell stock for investors moving forward or should you just ignore both?

What Are FuelCell Energy Inc and Plug Power Inc?

Small cap FuelCell Energy Inc is an integrated fuel cell company that designs, manufactures, installs, operates and services stationary fuel cell power plants which provide ultra-clean, efficient and reliable baseload distributed generation for electric utilities, commercial and industrial companies, universities, municipalities, government entities and other customers in more than more than 50 locations worldwide. The company has more than 300 megawatts of power generation capacity installed or in backlog plus the company's power plants have generated more than 1.8 billion kilowatt hours of ultra-clean power using a variety of fuels including renewable biogas from wastewater treatment and food processing plus natural gas. 

Meanwhile, Plug Power Inc was formed in 1997 as a joint venture of Michigan utility owner DTE Energy Co (NYSE: DTE) and Mechanical Technology Inc (OTCMKTS: MKTY) to develop fuel-cell systems to power homes and small businesses. Plug Power Inc says it has revolutionized the material handling industry with cost-effective power solutions that increase productivity, lower operating costs and reduce carbon footprints as it manufactures a full suite of products designed to fit seamlessly into the existing battery compartment of all major OEM material handling equipment. The company also says that its GenDrive fuel cell is a superior alternative to lead-acid batteries for electric lift trucks in the $20 billion global material handling market.

What You Need to Know or Be Warned About FCEL and PLUG

Here is what you need to know about both small cap fuel cell stocks:

FuelCell Energy Inc. In a recent interview with a Forbes contributor, the CEO of FuelCell Energy Inc talked about how global trends are now helping the fuel cell industry: 

"We have a world with a lot of things going on. Denuclearization is creating electricity supply issues in some countries. There's a debate about solar.  Throughout all that discussion, I think our timing is good to come up with cost-competitive clean infrastructure plays, which is what FuelCell Energy does."

He added that while the fuel cell industry has developed slowly, this year has been different as "we did see a lot more recognition that the kind of things we are doing can really add value, not just economic but also offsetting infrastructure costs." Last September, FuelCell Energy Inc reported an 81% revenue increase to $53.7 million and a net loss attributable to common shareholders of $6.4 million verses $10.7 million while total cash on the balance sheet increased by $19.7 million thanks to the net proceeds of $35.5 million from the issuance of convertible notes at a conversion price of approximately $1.55 per share during the quarter (Note: Shares closed at $1.35 on Tuesday). However and besides the smaller net loss, what excited shareholders was the announcement of a co-marketing agreement with NRG Energy Inc (NYSE: NRG) for the marketing and sales of FuelCell Energy Inc power plants. Specifically, NRG will market the power plants to its customer base as well as offer a financing option utilizing a power purchase agreement.

Plug Power Inc. Tomorrow morning before the market opens, Plug Power Inc is scheduled to report earnings with the earnings call scheduled for 10 am. Last week, the CEO noted in an interview with Bloomberg that Plug Power Inc is in talks with auto suppliers and component makers about producing fuel cells that may be attached to battery systems and let vehicles continue on the road after draining their batteries – a development that would allay "range anxiety" and could help the company report a profit by the third quarter of next year (PLUG has not had a profitable quarter since its 1999 IPO). Nevertheless, investors should pay close attention to the upcoming earnings call as back in October, Plug Power Inc did receive a Staff Determination letter from The NASDAQ Stock Market regarding possible delisting as its share price was below $1. Otherwise, it should be mentioned that Plug Power Inc did do an offering of 18,600,000 shares priced at $0.54 per share for gross proceeds of approximately $10.0 million back in September. Share Performance: FuelCell Energy Inc vs. Plug Power Inc

On Tuesday, small cap FuelCell Energy Inc rose 0.75% to $1.35 (FCEL has a 52 week trading range of $0.83 to $1.64 a share) for a market cap of $258.32 million plus the stock is up 46.7% since the start of the year and down 68.8% over the past five years while small cap Plug Power Inc fell 0.83% to $0.525 (PLUG has a 52 week trading range of $0.12 to $0.80 a share) for a market cap of $53.55 million plus the stock is up 5.1% since the start of the year and down 94% over the past five years. Here are the rather ugly long term charts for both small cap fuel cell stocks:

Finally, here is a look at the technical charts for both FuelCell Energy Inc and Plug Power Inc:

The Bottom Line. As things start to look more positive, speculative investors might want to take a closer look at both FuelCell Energy Inc and Plug Power Inc while more conservative investors should just still with more traditional energy or power plays.