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 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 underperformed the broader market over the past year. It has provided a total return of -45.3% over the past 12 months, well below the Russell 1000's total return of 13.4%, as of September 25, 2020. All statistics in the tables below are as of September 28.
Here are the top 3 energy stocks with the best value, growth, and the best performance.
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|
|Murphy Oil Corp. (MUR)||8.73||1.3||5.7|
|Cheniere Energy Inc. (LNG)||49.65||12.5||11.6|
|Valvoline Inc. (VVV)||19.12||3.5||16.2|
- Murphy Oil Corp.: Murphy Oil is a global oil and gas exploration and production company. It also has refining and retail operations.
- Cheniere Energy Inc.: Cheniere Energy is an energy company focused on liquefied natural gas (LNG). It owns and operates LNG terminals and pipelines.
- 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 reported a 9.2% decline in net income as sales fell 15.8% in Q2 2020, which ended June 30, 2020. The company noted that lockdowns related to COVID-19 adversely impacted its financial results in April and May, but the situation began to improve in June.
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 (%)|
|Valero Energy Corp. (VLO)||43.92||17.9||108.8|
|Antero Midstream Corp. (AM)||5.34||2.5||28.6|
|Williams Companies Inc. (WMB)||19.98||24.3||-3.9|
- Valero Energy Corp.: Valero Energy refines petroleum and produces ethanol at operations in the U.S., Canada, and Aruba. The company produces conventional gasolines, distillates, jet fuel, asphalt, petrochemicals, lubricants, diesel fuel, and other refined products. Valero Energy posted net income growth of 106.0% despite a 64.1% decline in revenue in Q2 2020, which ended June 30, 2020. Net income was boosted by much lower cost of sales than in the year-ago quarter. The company said that the economic impact of the pandemic has led to reduced demand for many of its refined petroleum products.
- 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. Antero Midstream reported net income growth of 27.7% despite a 14.0% decline in revenue in Q2 2020, which ended June 30, 2020. Net income was boosted by much lower operating expenses compared to the year-ago quarter.
- Williams Companies Inc.: Williams Companies is an energy infrastructure company operating natural gas pipelines across North America.
Energy Stocks with the Best Performance
These are the energy stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.
|Energy Stocks with the Best Performance|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|EQT Corp. (EQT)||13.87||3.5||25.2|
|Cabot Oil & Gas Corp. (COG)||18.12||7.2||5.4|
|Antero Midstream Corp. (AM)||5.34||2.5||-8.0|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||-45.3|
- 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 reported a net loss of $263.1 million in Q2 2020 ended June 30, 2020, compared to net income of $125.6 million in the year-ago quarter. Revenue for the quarter fell 59.8%.
- Cabot Oil & Gas Corp.: Cabot Oil & Gas develops and explores oil and gas properties throughout North America, including locations in Texas, the Rocky Mountains, and Western United States. Cabot Oil & Gas reported a 83.2% decline in net income as revenue fell 37.8% in Q2 2020, which ended June 30, 2020. The company said it had succeeded in maintaining profitability amid historically low natural gas prices due to the pandemic.
- Antero Midstream Corp.: See above for company description.
YCharts. "Financial Data." Accessed Sep. 28, 2020.
Valvoline Inc. "Valvoline Reports Third-Quarter Results." Accessed Sep. 28, 2020.
Valero Energy Corp. "Valero Energy Reports Second Quarter 2020 Results," Pages 6 & 7. Accessed Sep. 28, 2020.
Antero Midstream Corp. "Antero Midstream Reports Second Quarter 2020 Results and Announces Updated 2020 Capital Budget & Guidance." Accessed Sep. 28, 2020.
EQT Corp. "EQT Reports Second Quarter 2020 Results." Accessed Sep. 28, 2020.
Cabot Oil & Gas Corp. "Cabot Oil & Gas Corporation Reports Second Quarter 2020 Results." Accessed Sep. 28, 2020.