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The energy sector is composed of companies focused on the exploration, production, and marketing of oil, gas, and renewable resources around the world. Energy sector stocks include upstream companies that are primarily engaged in the exploration of oil or gas reserves, such as Devon Energy Corp. (DVN). Downstream companies include HollyFrontier Corp. (HFC), which refines and processes oil and gas products for delivery to consumers. Among the industry’s biggest players are Chevron Corp. (CVX) and ExxonMobil Corp. (XOM).
Oil prices have surged dramatically in the past year, after plunging in spring 2020 at the onset of the global COVID-19 health crisis. Oil prices are the highest they have been since 2014. In the fall of 2021, natural gas prices hit their highest levels in nearly 15 years. They have come back down but are still at multi-year highs.
Energy stocks, as represented by an exchange-traded fund (ETF)—the Energy Select Sector SPDR ETF (XLE)—have outperformed the broader market, posting a total return of 58.6% over the last 12 months compared to the Russell 1000 Index’s total return of 20.0%. These market performance numbers and all statistics in the tables below are as of Jan. 18, 2022.
Below are the top three 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 that you’re paying less for each dollar of profit generated.
| Best Value Energy Stocks | |||
|---|---|---|---|
| Price ($) | Market Capitalization (Market Cap) ($B) | 12-Month Trailing P/E Ratio | |
| Marathon Petroleum Corp. (MPC) | 74.55 | 45.9 | 5.3 |
| HollyFrontier Corp. (HFC) | 37.54 | 6.1 | 12.9 |
| Valvoline Inc. (VVV) | 34.77 | 6.3 | 15.2 |
Source: YCharts
- Marathon Petroleum Corp.: Marathon is a crude oil refining company. Serving customers across the U.S., the company refines, supplies, transports, and sells petroleum products.
- HollyFrontier Corp.: HollyFrontier refines and markets petroleum products. It produces high value light products, such as gasoline, diesel fuel, jet fuel, and other specialty products. The company also offers crude oil transportation, storage, and throughput services to the petroleum industry. The company announced in November the promotion of Tim Go to president and chief operating officer (COO), effective immediately. He previously served as executive vice president and COO since June 2020.
- Valvoline Inc.: Valvoline is a global marketer and supplier of premium-branded lubricants and automotive services. It offers motor oil, transmission fluid, antifreeze, and other lubricants. The company also operates and franchises quick-lube stations.
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 YOY percentage revenue growth and 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
Source: YCharts
- Targa Resources Corp.: Targa Resources is a midstream natural gas and natural gas liquids (NGL) services company. It gathers, compresses, treats, processes, transports, and sells natural gas, NGLs, and crude oil. The company recently announced that it as agreed to repurchase interests in its development company joint ventures (JV) for approximately $925 million from investment vehicles affiliated with Stonepeak Partners LP.
- ONEOK Inc.: ONEOK is a midstream service provider. The company owns and operates a network of natural gas gathering, processing, storage, and transportation assets. Its NGL system connects NGL supply in the Rocky Mountain, Mid-Continent, and Permian regions with key market centers.
- Texas Pacific Land Corp.: Texas Pacific Land owns tracts of land in Texas, with the majority of its ownership located in the Permian Basin. The company does not produce oil and gas, but generates revenue across the entire value chain of oil and gas development through surface and royalty ownership. Texas Pacific Land announced in early November financial results for Q3 of its 2021 fiscal year (FY), the three-month period ended Sept. 30, 2021. Net income rose 81.2% compared to the year-ago quarter as revenue expanded 66.3%.
These are the energy stocks that had the highest total return over the last 12 months.
| Energy Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Devon Energy Corp. (DVN) | 50.36 | 34.1 | 173.5 |
| Continental Resources Inc. (CLR) | 52.14 | 19.1 | 172.7 |
| Marathon Oil Corp. (MRO) | 19.43 | 15.1 | 138.9 |
| Russell 1000 | N/A | N/A | 20.0 |
| Energy Select Sector SPDR ETF (XLE) | N/A | N/A | 58.6 |
Source: YCharts
- Devon Energy Corp.: Devon Energy is an energy company involved in oil and gas exploration, development, and production. The company also transports oil, gas, and related products and processes natural gas.
- Continental Resources Inc.: Continental Resources explores for and produces oil in the U.S. Its operations are primarily located in the Bakken Formation of North Dakota and Montana, but it also has significant positions in Oklahoma, Wyoming, and Texas. The company recently announced that it has named Doug Lawler as COO and executive vice president, effective Feb. 1, 2022. Lawler, who most recently served as president and chief executive officer (CEO) of Chesapeake Energy Corp. (CHK) from 2013 to 2021, will take over the COO position from President and COO Jack Stark, who announced his intention to retire by late spring 2022. Billy Berry will assume the role of president in addition to his current role of CEO.
- Marathon Oil Corp.: Marathon Oil is an independent energy company focused on the exploration and production of oil and gas. The company’s operations are located in four of the major resource plays in the U.S.—Eagle Ford, Bakken, STACK/SCOOP, and Permian—as well as operations in Equatorial Guinea.
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