The energy sector is composed 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 Chesapeake Energy Corp. (CHK). Downstream companies include HollyFrontier Corp. (HFC), which refines and processes oil and gas products for delivery to consumers.
The benchmark Energy Select Sector SPDR ETF (XLE), an exchange-traded fund (ETF), has significantly outperformed the broader market in the last year. XLE has provided a total return of 68.1% over the past 12 months, above the iShares Russell 1000 ETF’s (IWB) total return of 33.5%. These market performance numbers and all statistics in the tables below are as of Nov. 18, 2021.
Here are the top three energy stocks with the best value, fastest growth, and 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 ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Marathon Petroleum Corp. (MPC)||63.58||39.1||4.5|
|HollyFrontier Corp. (HFC)||32.54||5.3||11.2|
|Antero Midstream Corp. (AM)||10.47||5.0||15.2|
- 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. The company reported net income of $694 million attributable to Marathon Petroleum Corp. for Q3 2021, ended Sept. 30, compared with a net loss for the prior-year quarter. It also reported an 85.9% year-over-year (YOY) increase in total revenues and other income. The results included pre-tax charges related to Hurricane Ida, impairments, and idling costs.
- HollyFrontier Corp.: HollyFrontier transports, refines, stores, and sells petroleum products. It offers light products including gasoline and jet fuel, which are sold in the southwestern U.S. and northern Mexico. On Nov. 10, the company announced the promotion of Tim Go to president and chief operating officer, effective immediately. Previously, Go was executive vice president and chief operating officer of the company since June 2020.
- Antero Midstream Corp.: Antero Midstream owns, operates, and develops energy infrastructure. The company owns and operates gathering pipelines, compressor stations, processing and fractionation plants, and similar infrastructure.
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest Growing Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Targa Resources Corp (TRGP)||54.62||12.5||312.5||110.9|
|ONEOK Inc. (OKE)||63.50||28.3||25.7||108.6|
|Texas Pacific Land Corp. (TPL)||1,258.02||9.7||81.2||66.3|
- Targa Resources Corp.: Targa Resources Corp. is a midstream natural gas and natural gas liquids services company. It gathers, compresses, treats, processes and sells natural gas, liquid petroleum gas and crude oil. Net income attributable to Targa Resources Corp. jumped 164% as total revenues more than doubled in Q3 2021 ended Sept. 30. The company raised its year-end 2021 targets for EBITDA and also for average Permian natural gas inlet volumes.
- ONEOK Inc.: ONEOK is a diversified energy company with operations across the United States. It is a midstream energy company focused on natural gas. On Nov. 15, ONEOK announced plans to complete previously announced natural gas and natural gas liquids infrastructure projects in North Dakota and in Texas. The first of these projects is expected to increase the company's natural gas processing capacity to approximately 1.9 billion cubic feet per day, while the second will increase ONEOK's natural gas liquids fractionation capacity to more than 1 million barrels per day.
- Texas Pacific Land Corp.: Texas Pacific Land Corp. owns tracts of land in Texas. It issues transferable certificates of proprietary interest and derives income from land sales, oil and gas royalties, and grazing leases. For Q3 2021 ended Sept. 30, the company reported net income growth of 81.2% YOY on strong growth in total revenues. Texas Pacific Land Corp. attributed the performance in part to its "vast surface footprint" and strategic investments in its water business.
These are the energy stocks that had the highest total return over the last 12 months.
|Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Devon Energy Corp. (DVN)||42.29||28.6||238.4|
|Continental Resources Inc. (CLR)||46.49||17.0||220.3|
|Marathon Oil Corp. (MRO)||16.09||12.5||196.8|
|Russell 1000 (IWB)||N/A||N/A||33.5|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||68.1|
- 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. It has midstream and marketing operations primarily in North America. On Nov. 2, Devon Energy announced a fixed-plus-variable dividend of $0.84 per share, payable on Dec. 30 to shareholders of record as of Dec. 10, 2021. This represents a 71% increase in the dividend payout compared to the previous quarter.
- Continental Resources Inc.: Continental Resources explores and produces on-shore oil-prone plays in the U.S. The company focuses its operations largely in North Dakota and Montana.
- Marathon Oil Corp.: Marathon Oil Corp is involved in oil and gas exploration, development, and production in the United States and abroad.
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 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 in 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.
YCharts. “Financial Data.” Accessed Nov. 21, 2021.
Marathon Petroleum Corp. "Marathon Petroleum Corp. Reports Third-Quarter 2021 Results," Pages 1, 8. Accessed Nov. 22, 2021.
HollyFrontier Corp. "HollyFrontier Announces Promotion of Tim Go to President and Chief Operating Officer." Accessed Nov. 22, 2021.
Targa Resources Corp. "Targa Resources Corp. Reports Third Quarter 2021 Financial Results." Accessed Nov. 21, 2021.
ONEOK Inc. "ONEOK Restarts Construction of Natural Gas and NGL Projects." Accessed Nov. 21, 2021.
Texas Pacific Land Corp. "Texas Pacific Land Corporation Announces Third Quarter Results." Accessed Nov. 21, 2021.
Devon Energy Corp. "Devon Energy Announces Third-Quarter Dividend and Next Step in Cash-Return Strategy with $1.0 Billion Share-Repurchase Program." Accessed Nov. 21, 2021.