The oil & gas industry is comprised of upstream companies that explore and produce energy, midstream pipeline companies that transport and store energy, and downstream companies that refine oil and gas into finished products. Additionally, there are companies that provide oilfield drilling equipment and services, and also manufacture and maintain equipment used in production. The industry's biggest companies are Netherlands-based Royal Dutch Shell PLC (RDS.A), U.K.-based BP PLC (BP), and Exxon Mobil Corp. (XOM).
Oil demand and prices collapsed a year ago as COVID-19 prompted governments to shut down commerce and require millions of people to stay at home. However, crude oil prices have recovered as governments have gradually permitted businesses to reopen, and as new vaccines open the door to an economic recovery. The oil & gas industry, as represented by the Energy Select Sector SPDR ETF (XLE), posted a total return of 93.9% over the last year. This outperformed the Russell 1000's 66.1%, return. These figures and all statistics in the tables below are as of March 12.
Here are the top 3 oil and gas stocks with the best value, the fastest growth, and the most momentum.
These are the oil and gas 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 Oil and Gas Stocks|
|Price ($)||Market Cap ($M)||12-Month Trailing P/E Ratio|
|Diamond S Shipping Inc. ( DSSI)||9.33||377.3||3.5|
|Frontline Ltd. ( FRO)||7.69||1,520||3.7|
|DHT Holdings Inc. ( DHT)||6.25||1,067||3.9|
- Diamond S Shipping Inc.: Diamond S Shipping ships crude oil, refined petroleum, and other products internationally. It owns and operates 64 vessels. The company reported a Q4 2020 net loss of $57.8 million attributable to Diamond S Shipping, reversing a $26.1 million profit a year earlier. Total revenue fell by more than 50% year-over-year (YOY) as depressed oil demand hurt tanker volumes.
- Frontline Ltd.: Frontline, headquartered in Bermuda, is an international shipping company that owns and operates oil and product tankers. It uses these to ship crude oil and refined products.
- DHT Holdings Inc.: DHT Holdings, based in Bermuda, is a crude oil tanker company. At the end of January, it purchased two very large crude carriers (VLCC), adding to its fleet of 27 VLCCs. The company's Q4 2020 net income fell by about 90% YOY to $7.6 million as shipping revenue fell by more than half.
These are the oil and gas stocks with the highest year-over-year (YOY) operating income growth for the most recent quarter. This also is called operating earnings. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Operating income excludes non-operating income and expenses (such as investment gains or losses), one-time items, as well as interest and taxes. This helps investors get a clearer picture at the strength of the underlying business without the effect of unusual one-off events, such as large tax credits, asset sales, or lawsuit settlements. If you decided to invest in a company, it's still important to look at these one-off non-operating expenses and incomes, as they can still influence a company's overall financial health.
|Fastest Growing Oil and Gas Stocks|
|Price ($)||Market Cap ($M)||Operating Income Growth (%)|
|SEACOR Holdings Inc. ( CKH)||41.30||846.6||516.5|
|Hess Corp ( HES)||72.49||22,250||346.7|
|DCP Midstream LP ( DCP)||26.09||5,436||150.0|
- SEACOR Holdings Inc.: SEACOR Holdings is involved in transportation and logistics, risk management, and other activities such as developing alternative energy and power solutions. In December, private-equity firm American Industrial Partners agreed to buy SEACOR in a transaction valued at $1 billion, or $41.50 a share. But the deal is yet to be finalized. After announcing several deadlines, AIP earlier this month informed SEACOR Holdings that its "best and final" offer would expire on March 12.
- Hess Corp.: Hess explores, develops, produces, and transports, crude oil, natural gas liquids, and natural gas with major production operations located in the United States, Guyana, and Malaysia. It also owns a large stake in Hess Midstream LP, which provides fee-based services.
- DCP Midstream LP.: DCP Midstream is a master limited partnership that gathers, compresses, processes, transports, stores, and sells natural gas. It also produces and sells natural gas liquids. DCP owns and operates more than 60 plants and 64,000 miles of natural gas and natural gas liquids pipelines.
These are the oil and gas stocks that had the highest total return over the last 12 months.
|Oil and Gas Stocks with the Most Momentum|
|Price ($)||Market Cap ($M)||12-Month Trailing Total Return (%)|
|Oasis Petroleum Inc. ( OAS)||60.00||1,206||16,180|
|Extraction Oil & Gas Inc. ( XOG)||35.49||884.7||12,580|
|Aemetis Inc. ( AMTX)||20.83||454.4||3,310|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||93.9|
- Oasis Petroleum Inc.: OAS Petroleum is an independent E&P company focusing on acquiring and developing onshore, unconventional crude oil and natural gas in Williston Basin, located in North Dakota and Montana, and the Permian Basin in Texas.
- Extraction Oil & Gas Inc.: Extraction Oil & Gas is an E&P company that develops and produces crude oil, natural gas, and natural gas liquids in the Denver-Julesburg Basin located in Colorado. In January, the company emerged from Chapter 11 bankruptcy, which included reducing total debt by nearly $1.4 billion to $265 million.
- Aemetis Inc.: Aemetis is a renewable natural gas and fuel company that acquires, develops, and commercializes technologies designed to replace traditional carbon-based products and reduce greenhouse gas emissions. Its Q4 2020 loss attributable to Aemetis almost doubled to $14.6 million on a 28.4% YOY revenue decline. Management stated that the revenue decline was due to several factors, including a temporary drop in North American ethanol production.
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YCharts. "Financial Data." Accessed Dec. 8, 2020.
Diamond S Shipping Inc. "Diamond S Shipping Inc. Reports Fourth Quarter 2020 Results." Accessed March 15, 2021.
DHT Holdings Inc. "DHT Holdings, Inc. Fourth Quarter 2020 Results," Page 10. Accessed March 16, 2021.
SEACOR Holdings Inc. "SEACOR Holdings Announced Take Private Transaction With American Industrial Partners Valuing the Company at Approximately $1 Billion." Accessed March 16, 2021.
Business Wire. "American Industrial Partners Announces Best and Final Offer for the Acquisition of SEACOR Holdings Inc." Accessed March 16, 2021.
Extraction Oil & Gas Inc. "Extraction Oil & Gas Completes Financial Restructuring." Accessed March 15, 2021.
Aemetis, Inc. " Aemetis Reports 2020 Fourth Quarter and Year-End Results." Accessed March 15, 2021.