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 in March, but has still drastically underperformed the broader market. It has provided a total return of -23.0% over the past 12 months, well below the Russell 1000’s total return of 20.8%, as of January 13, 2020. All statistics in the tables below are as of January 13.
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.
|Best Value Energy Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Valvoline Inc. (VVV)||23.83||4.4||14.0|
|Cheniere Energy Inc. (LNG)||65.67||16.6||17.7|
|ONEOK Inc. (OKE)||43.71||19.4||30.4|
- 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. Valvoline announced in early December that it had agreed to purchase 27 oil-change service stations from Car Wash Partners Inc. Financial terms of the agreement were not disclosed.
- Cheniere Energy Inc.: Cheniere Energy is an energy company focused on liquefied natural gas (LNG). It owns and operates LNG terminals and pipelines. On November 6, Cheniere Energy reported a net loss attributable to its common stockholders of $463 million as revenue fell 32.7% for Q3 2020, which ended September 30, 2020.
- ONEOK Inc.: ONEOK focuses exclusively on the gathering, processing, storage, and transportation of natural gas in the United States. On October 27, ONEOK reported a 1% increase in net income and 14% gain in operating income year-over-year (YOY) for Q3 2020 ending September 30, aided by recovering natural gas processing volumes. Despite that improvement, net income was down 68% for the first nine months of 2020 compared to the same period a year earlier.
Energy Stocks With the Most Profit Growth or Least Profit Decline
These are the energy stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or lowest EPS decline for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Energy Stocks With the Most Profit Growth or Least Profit Decline|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Valvoline Inc. (VVV)||23.83||4.4||371.4|
|Williams Companies Inc. (WMB)||22.24||27.0||38.9|
|ONEOK Inc. (OKE)||43.71||19.4||-5.4|
- Valvoline Inc.: See above for company description.
- Williams Companies Inc.: Williams Companies is an energy infrastructure company operating natural gas pipelines across North America. On November 2, the company reported net income growth of 33.5% despite a 3.3% decline in revenue in Q3 2020, which ended September 30, 2020. Net income was boosted by lower costs and expenses than in the same quarter a year ago.
- ONEOK Inc.: See above for company description.
Energy Stocks with the Most Momentum
These are the energy stocks that had the highest total return over the last 12 months.
|Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|EQT Corp. (EQT)||17.19||4.7||106.5|
|Antero Midstream Corp. (AM)||8.35||4.0||45.7|
|Valvoline Inc. (VVV)||23.83||4.4||15.4|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||-23.0|
- 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 announced in late October that it had entered an agreement with Chevron U.S.A. Inc. to acquire Chevron’s upstream and midstream assets in the Appalachian Basin for $735 million.
- 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. On October 28, the company reported its financial results for Q3 2020, which ended September 30, 2020. Antero posted net income of $105.5 million compared to a net loss of $289.5 million in the year-ago quarter. Revenue fell 4.3%. Net income was boosted by significantly lower operating expenses compared to Q3 2019.
- Valvoline Inc.: See above for company description.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.