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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 Concho Resources Inc. (CXO). 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, but has still drastically underperformed the broader market. It has provided a total return of -9.2% over the past 12 months, well below the Russell 1000’s total return of 21.4%, as of February 17, 2021. All statistics in the tables below are as of February 17.
Here are the top 3 energy stocks with the best value, the fastest growth, and the most momentum.
Best Value Energy Stocks
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
- 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 February 3, Valvoline reported Q1 FY 2021 results for the quarter ended December 31, 2020. Net income rose 19.2% (YOY), owing in part to pension and other post-employment benefit impacts. Quarterly sales climbed by 7.6% YOY.
- Cheniere Energy Inc.: Cheniere Energy is an energy company focused on liquefied natural gas (LNG). It owns and operates LNG terminals and pipelines.
- ONEOK Inc.: ONEOK focuses exclusively on the gathering, processing, storage, and transportation of natural gas in the United States. The company’s board declared a quarterly dividend of $0.935 per share in January. The dividend, which is unchanged from the previous quarter, was payable February 12 to shareholders of record as of February 1.
Fastest Growing Energy Stocks
These are the energy stocks with the highest YOY earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
Source: YCharts
- Baker Hughes Co.: Baker Hughes is a provider of oilfield products and services, including gas turbines, valves, actuators, pumps, and motors. The company also offers related services such as surface logging, drilling, petroleum engineering, and pipeline operations. On February 18, Baker Hughes announced it would acquire is ARMS Reliability, a global provider of reliability solutions to industrial companies around the world. The acquisition is expected to strengthen Baker Hughes’ industrial asset performance-management capabilities. Terms of the acquisition were not provided in the press release.
- Williams Companies Inc.: Williams Companies is an energy infrastructure company operating natural gas pipelines across North America. In January, the company announced a quarterly dividend of $0.41 per share of common stock, payable on March 29 to shareholders of record as of March 12. This represents a 2.5% increase YOY.
- Valvoline Inc.: See above for company description.
Energy Stocks with the Most Momentum
These are the energy stocks that had the highest total return over the last 12 months.
Source: YCharts
- EQT Corp.: EQT is an integrated energy company focused on natural gas production, gathering, and transmission in the Appalachian area. The company explores for and produces natural gas, natural gas liquids, and crude oil. EQT reported Q4 financial results on February 17. For that period, the company reported net income of $64 million as compared with net loss of $1.2 billion one year prior. EQT also reported a total sales volume increase of 7.5% YOY. The increase in net income is attributable to decreased impairments and increased operating revenue.
- Antero Midstream Corp.: Antero Midstream owns, operates, and develops midstream energy assets. It operates gathering pipelines and compressor stations, and operates water distribution, clearwater facility, fractionation, and pipeline safety services. For Q4 FY 2020, Antero reported net income of $76.5 million as compared with net loss of $144.6 million for Q4 FY 2019. The company also forecasted a 2021 capital budget of between $240 million and $260 million owing to a drilling partnership expected to accelerate growth. The company will reallocate some of its dividend payments to fund infrastructure projects internally to avoid adding debt or leverage.
- Cimarex Energy Co.: Cimarex Energy explores and produces both crude oil and natural gas products. The company maintains operations in Oklahoma, Kansas, Louisiana, and Texas.
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