Top Energy Stocks for May 2022

MPC, EQT, and DVN are top for value, growth, and momentum, respectively

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 primarily engage in the exploration of oil or gas reserves, such as Devon Energy Corp. Downstream companies include Marathon Petroleum Corp., which refines and processes oil and gas products for delivery to consumers. Among the industry’s biggest players are Chevron Corp. and ExxonMobil Corp.

Oil and gas prices have spiked due to Russia’s invasion of Ukraine. Brent crude oil prices have jumped to more than $100 per barrel, the highest level since 2014. In response to the invasion, Germany has halted the Nord Stream 2 gas pipeline project, which was expected to double the flow of Russian gas to Germany.

Energy stocks, as represented by an exchange-traded fund (ETF)—the Energy Select Sector SPDR ETF (XLE)—have dramatically outperformed the broader market, posting a total return of 71.1% over the past 12 months compared to the Russell 1000 Index’s total return of 4.4%. These market performance numbers and all statistics in the tables below are as of April 15, 2022.

Below are the top three 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) ratios. 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) 87.20 49.3 5.8
HF Sinclair Corp. (DINO) 38.15 8.5 11.2
Diamondback Energy Inc. (FANG) 138.44 24.6 11.4

Source: YCharts

  • Marathon Petroleum Corp.: Marathon is a crude oil refining company. Serving customers across the United States, the company refines, supplies, transports, and sells petroleum products. On Feb. 21, 2022, an explosion at the company’s crude oil refinery in Garyville, La., caused a fire that was extinguished later in the day. The accident, at the third-largest U.S. refinery by processing capacity, contributed to a brief surge in gasoline futures prices.
  • HF Sinclair Corp.: HF Sinclair is an independent energy company. It produces and sells high-value light products, including gasoline, diesel fuel, jet fuel, renewable diesel, and other specialty products. The company also supplies high-quality fuels and specialized lubricants, and it operates a growing renewables business. HF Sinclair was created in mid-March 2022 as the new parent company of HollyFrontier Corp. and Holly Energy Partners L.P., including each company’s respective acquisitions of Sinclair Oil Corp. and Sinclair Transportation Co. from The Sinclair Companies.
  • Diamondback Energy Inc.: Diamondback Energy is an independent oil and natural gas company. It focuses on the acquisition, development, and exploration of onshore oil and natural gas reserves in the Permian Basin. On Feb. 22, 2022, the company announced that it was increasing its annual dividend by 20.0% to $2.40 a share.

Fastest Growing Energy Stocks

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 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.

Fastest Growing Energy Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
EQT Corp. (EQT) 42.36 15.9 1,940 235.7
Coterra Energy Inc. (CTRA) 29.42 23.9 251.5 387.6
Pioneer Natural Resources Co. (PXD) 254.75 61.9 1,040 176.6

Source: YCharts

  • EQT Corp.: EQT is an integrated energy company focused on natural gas production in the Appalachian area. The company explores for and produces natural gas and natural gas liquids (NGLs).
  • Coterra Energy Inc.: Coterra Energy is an independent oil and gas exploration and production company with operations focused in the Permian Basin, Marcellus Shale, and Anadarko Basin.
  • Pioneer Natural Resources Co.: Pioneer Natural Resources is an independent oil and gas exploration and production company. It explores for and produces oil, NGLs, and gas in the Midland Basin of West Texas.

Energy Stocks with the Most Momentum

These are the energy stocks that had the highest total return over the past 12 months.

Energy Stocks with the Most Momentum
Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Devon Energy Corp. (DVN) 62.56 41.6 197.0
Marathon Oil Corp. (MRO) 26.61 19.5 143.5
APA Corp. (APA) 43.68 15.2 143.0
Russell 1000 N/A N/A 4.4
Energy Select Sector SPDR ETF (XLE) N/A N/A 71.1

Source: YCharts

  • Devon Energy Corp.: Devon Energy is involved in oil and gas exploration, development, and production. The company also transports oil, gas, and related products and processes natural gas. In mid-February 2022, Devon Energy announced that its board of directors declared a record-high fixed-plus-variable dividend of $1.00 per share to be paid on March 31, 2022, to shareholders of record as of March 14, 2022. After the fixed portion of the dividend is distributed, up to 50% of each quarter’s excess free cash flow will be paid to shareholders through the variable dividend. Devon Energy’s board also authorized a 60% expansion of the company’s share repurchase program, increasing the total value of shares to be repurchased to $1.6 billion.
  • 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. In late January 2022, Marathon Oil announced that its board of directors declared its fourth consecutive increase of the company’s quarterly base dividend, which was paid in March 2022. The company said that it has increased its dividend by more than 130% over the past year.
  • APA Corp.: APA is an oil and gas exploration and production company. It has operations in the U.S., Egypt’s Western Desert, and the United Kingdom’s North Sea. It also has exploration opportunities offshore of Suriname. In mid-March 2022, the company announced that it had recently completed two transactions, which together generated net proceeds of approximately $1 billion. The company completed the sale of a Delaware Basin mineral package for approximately $805 million on March 7, 2022. Days later, one of the company’s subsidiaries completed the sale of 4 million shares of Kinetik Class A common stock for $224 million.

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Article Sources

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  1. The New York Times. “Oil Prices Soar and Worries Mount About Future Energy Supplies.

  2. CNBC. “Natural Gas (May’22).”

  3. CNBC. “Brent Crude Oil (Sep’22).”

  4. Reuters. “Germany Freezes Nord Stream 2 Gas Project as Ukraine Crisis Deepens.”

  5. YCharts. “Financial Data.”

  6. Reuters. “Marathon Louisiana Blaze Extinguished After Blast.”

  7. HF Sinclair. “HollyFrontier and Holly Energy Partners Announce Completion of Transactions with The Sinclair Companies and Establishment of New Parent Company, HF Sinclair Corporation.”

  8. Diamondback Energy. “Diamondback Energy, Inc. Announces Fourth Quarter and Full Year 2021 Financial and Operating Results; Increases Dividend.”

  9. EQT. “Corporate Profile.”

  10. Coterra Energy. “Who We Are.”

  11. Pioneer Natural Resources. “About.”

  12. Devon Energy. “Devon Energy Announces Fourth-Quarter Dividend and Next Steps in Cash-Return Strategy.”

  13. Marathon Oil, Investors. “Marathon Oil Corporation Declares Fourth Quarter 2021 Dividend.”

  14. APA, Investors. “APA Corporation Closes Two Transactions; Receives $1 Billion of Proceeds.”

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