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The energy sector is comprised of companies focused on the exploration, production, and marketing of oil, gas, and renewable resources around the world. Popular energy sector stocks include upstream companies that are primarily engaged in the exploration of oil or gas reserves. Well-known companies are 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 early 2020 oil price war and the COVID-19 pandemic drove oil prices to record lows in April 2020 and sharply pushed down energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE). XLE has risen from its bottom last year, and is now only slightly underperforming the broader market. It has provided a total return of 50.9% over the past 12 months, just below the Russell 1000’s total return of 52.8%. These market performance numbers and all statistics in the tables below are as of April 20, 2021.
Here are the top 3 energy stocks with the best value, the fastest growth, and the most momentum.
These are the energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
Source: YCharts
- Equitrans Midstream Corp.: Equitrans Midstream owns and operates midstream assets in the Appalachian Basin. The company manages natural gas transmission, storage, and gathering systems and lines.
- 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.
- Cabot Oil & Gas Corp.: Cabot Oil & Gas is an oil and gas company which develops and explores properties in North America. The company maintains interests in Texas, Louisiana, the Rocky Mountains, and the Appalachian and Anadarko Basins, as well as in Canada.
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
Source: YCharts
- Baker Hughes Co.: Baker Hughes provides oilfield products and services, including for drilling, pipeline operations, and petroleum engineering. It also offers gas turbines, valves, pumps, and other related products. Baker Hughes’ soaring EPS for Q4 2020, a reflected in the table above, was fueled by an unrealized gain on its investment in C3.ai Inc., an enterprise AI software company. Baker Hughes released Q1 2021 financial results on April 21, which showed a net loss (GAAP) of $452 million, which was dramatically narrower than the $10.2 billion loss posted in the same quarter a year earlier. Revenue fell 11.9% YOY.
- Valvoline Inc.: See above for company description.
- Williams Companies Inc.: Williams Companies is an energy infrastructure company. It owns and operates assets across North America in midstream gathering and processing, as well as interstate natural gas pipelines.
These are the energy stocks that had the highest total return over the last 12 months.
| Energy Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Targa Resources Corp. ( TRGP) |
32.23 | 7.4 | 318.5 |
| Cimarex Energy Co. ( XEC) |
59.98 | 6.2 | 211.5 |
| Halliburton Co. ( HAL) |
19.81 | 17.6 | 162.5 |
| Russell 1000 | N/A | N/A | 52.8 |
| Energy Select Sector SPDR ETF (XLE) | N/A | N/A | 50.9 |
Source: YCharts
- Targa Resources Corp.: Targa Resources provides natural gas and natural gas liquids services. The company gathers, compresses, treats, process, and sells natural gas. It also stores, fractionates, treats, transports, and sells natural gas liquids and related products. The company’s board of directors announced on April 15 that it had declared a quarterly cash dividend of $0.10 per common share for Q1 2021. The dividend will be paid on May 14, 2021 to shareholders of record as of April 30.
- Cimarex Energy Co.: Cimarex is a crude oil and natural gas exploration and development company. It’s engaged in drilling, completing and operating wells in states including Oklahoma, Texas and New Mexico.
- Halliburton Co.: Halliburton provides engineering and construction services and manufactures products for customers in the energy industry. For Q1 2021, Halliburton reported net income of $171 million compared to net loss of $1.0 billion for Q1 2020. Revenue declined sharply during the same period. The Q1 2020 net loss figure was impacted by a pre-tax charge of $1.1 billion.
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