The energy sector is made up of companies focused on the exploration, production and marketing of oil, gas and renewable resources around the world. Popular stocks in the energy sector include upstream companies primarily engaged in the exploration of oil or gas reserves. Well-known companies include Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK). Downstream companies include HollyFrontier Corp. (HFC), which refines and processes oil and gas products for delivery to consumers.
The oil price war in early 2020 and the COVID-19 pandemic caused oil prices to plunge to record lows in April 2020, pushing energy stocks down sharply, as reflected by the Energy Select Sector SPDR ETF (XLE). The oil market may be poised for further volatility as OPEC Plus reached a deal in mid-July to increase production starting next month. XLE has risen from its lows last year and is now underperforming the broader market. XLE has delivered a total return of 37.6% over the past 12 months, just below the Russell 1000’s total return of 38.1%. These market performance figures and all statistics in the tables below are as of July 16, 2021.
Here are the top 3 energy stocks with the best value, fastest growth and most momentum.
These are the energy stocks with the lowest price-earnings ratio over 12 months. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you are paying less for every dollar of profit generated.
|Best Value Energy Stocks|
|Price ($)||Market Capitalization ($B)||12 month ongoing P/E ratio|
|Antero Midstream Corp. (AM)||9.68||4.6||13.3|
|Valvoline Inc. (TOURIST OFFICE)||30.41||5.5||16.7|
|ONEOK Inc. (OKAY)||53.31||23.8||20.6|
- Antero Midstream Corp.: Antero Midstream owns, develops and operates midstream energy assets. The company provides the safety of pipeline collection and related services in North America. On April 28, the company reported a net profit of $83 million on increasing revenues for the first quarter of 2021 compared to a loss a year earlier. Cost savings were an important driver for the improved results.
- Valvoline Inc.: Valvoline is a manufacturer and distributor of automotive lubricants and chemicals. The company produces motor oil, antifreeze, brake fluid, grease products and more. On July 19, the company announced a quarterly dividend of $0.125 per common stock, payable September 15 to shareholders who had a record August 30, 2021.
- ONEOK Inc.: ONEOK is a diversified energy company with operations in the US. It is a midstream energy company that focuses on the natural gas sector.
These are the top energy stocks, ranked by a growth model that rates companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and profits are critical factors for a company’s success. Therefore, ranking companies by only one growth metric makes a ranking susceptible to that quarter’s accounting anomalies (such as changes in tax laws or restructuring costs) that may prevent one figure or the other from being representative of the company in general. Companies with quarterly earnings per share or revenue growth of more than 2500% were excluded as outliers.
|Fastest growing energy supplies|
|Price ($)||Market Capitalization ($B)||EPS growth (%)||Revenue growth (%)|
|Cabot Oil & Gas Corp. (COG)||16.16||6.5||138.5||19.0|
|Valvoline Inc. (TOURIST OFFICE)||30.41||5.5||12.1||21.3|
|Cheniere Energy Inc. (LNG)||83.56||21.2||7.7||14.1|
- Cabot Oil & Gas Corp.: Cabot Oil & Gas is an oil and gas company that develops and researches properties in North America. The company has interests in Texas, Louisiana, the Rocky Mountains, and the Appalachian and Anadarko Basins, as well as Canada. The company announced on May 24 that it would combine with Cimarex Energy Co. (XEC) in a merger of equals. The enterprise value of the combined company is approximately $17 billion. The transaction is expected to close in the last quarter of 2021 and will result in a company operating under a new name.
- Valvoline Inc.: See above for company description.
- Cheniere Energy Inc.: Cheniere Energy owns and operates liquefied natural gas pipelines and terminals in Louisiana and Texas.
These are the energy stocks with the highest total return over the past 12 months.
|Energy stocks with the most momentum|
|Price ($)||Market Capitalization ($B)||12 months sequential total return (%)|
|Cimarex Energy Co. (XEC)||66.08||6.8||159.9|
|Devon Energy Corp. (DPN)||25.78||17.5||157.7|
|Texas Pacific Land Corp. (TPL)||1415.70||11.0||147.6|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||37.6|
- Cimarex Energy Co.: Cimarex is a crude oil and natural gas exploration and development company. It is engaged in drilling, completing and operating wells in states such as Oklahoma, Texas and New Mexico. As noted above, Cimarex will merge with Cabot Oil & Gas in an all-stock merger.
- Devon Energy Corp.: Devon Energy is an energy company engaged in the exploration, development and production of oil and gas. The company also transports oil, gas and related products and processes natural gas. It has midstream and marketing operations, primarily in North America.
- Texas Pacific Land Corp.: Texas Pacific Land Corp. is a land trust that owns approximately 900,000 acres in western Texas. The company is not an oil and gas company, but generates income from fees that energy companies pay for the use of the land and from royalties.
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