The S&P/ASX 200 Index (ASX: XJO) had a pretty poor day on Thursday, closing 0.28% down to 7,384.50. But one ASX 200 share left the index in the dust. That was none other than AGL Energy Limited (ASX: AGL).
Yes, AGL shares went up by a very healthy 4.66% on Thursday to finish the session at $5.84. This means the AGL share price is now trading 14.5% above its 20-year low of $5.10, which it descended to back on 16 November.
A partnership with Fortescue Future Industries?
So why did AGL shares have such a robust day? Especially in the face of an anaemic broader market?
Well, there was no news or announcements out of AGL today, so we can't say for sure. However, these gains could possibly be linked to the news out yesterday.
As we reported, AGL told investors that it has signed a memorandum of understanding (MOU) with Fortescue Future Industries. This could result in AGL transforming its Liddell and Bayswater coal-fired power stations into green hydrogen hubs.
The MOU will result in a 12-month feasibility study which will "map key operational and commercial plans for the project".
Fortescue Future Industries is the hydrogen venture started by Fortescue Metals Group Limited (ASX: FMG) boss Dr Andrew Forrest AO. It aims to produce 15 million tonnes of green hydrogen annually by 2030 using renewable energy.
AGL aims to close Liddell and Bayswater by 2023 and 2025 respectively. In their place, AGL is hoping to use renewable energy and large-scale batteries — ideally in conjunction with Fortescue Future Industries.
AGL share price snapshot
AGL's long-suffering shareholders will no doubt welcome today's price gains. AGL has seen its market capitalisation decimated over the past 5 years. This has occurred due to poor energy market profitability and concern over AGL's emissions-intensive power generation assets.
Despite the recent rally, the AGL share price is still down a nasty 51.9% year to date in 2021. It's also down close to 80% from the all-time highs of roughly $28 a share that we saw back in 2017.
At the current AGL share price, the company has a market capitalisation of $3.84 billion with a trailing dividend yield of 11.15%.
