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 in the sector 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). The XLE has rebounded since then, but even with that recovery, the index has dramatically underperformed the broader market, providing investors with a total return of -40.2% compared to the S&P 500's total return of 11.6% over the past 12 months. These market performance numbers and the statistics in the tables below are as of July 23.

The energy stocks below are best for value, profitability, and performance, respectively.

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
ConocoPhillips (COP) 40.89 43.9 12.8
EOG Resources Inc. (EOG) 50.19 29.2 13.8
ONEOK Inc. (OKE) 29.50 13.1 15.4

Source: YCharts

  • ConocoPhillips: ConocoPhillips is a global oil exploration and production company engaged in processing, refining, and marketing of crude oil, natural gas, and petroleum products. ConocoPhillips recently announced that it had entered into an agreement to acquire 140,000 net acres, holding over 1 billion barrels of oil equivalent (BBOE), in the Montney zone in Canada from Kelt Exploration Ltd. (KEL).
  • EOG Resources Inc.: EOG Resources is engaged in the exploration and development of oil, natural gas, and natural gas liquids. Its American operations are principally located in Texas, Wyoming, North Dakota, and New Mexico. It also has holdings in Canada, China, and the Republic of Trinidad and Tobago. In early May, the company reported growth in operating revenue of 16.2% for Q1 2020, which ended March 31, 2020. However, net income plunged 98.5%, largely driven by a significant increase in impairment costs compared to the same quarter a year ago.
  • ONEOK Inc.: ONEOK focuses exclusively on the gathering, processing, storage, and transportation of natural gas in the United States.

Most Profitable Energy Stocks

These are the energy stocks with the highest year-over-year (YOY) earnings per share (EPS) growth or smallest 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.

Most Profitable Energy Stocks

 

Price ($) Market Cap ($B) EPS Growth (%)
Chevron Corp. (CVX) 91.04 170.0 38.9
Pioneer Natural Resources Co. (PXD) 102.51 16.8 -15.5
Cabot Oil & Gas Corp. (COG) 18.48 7.4 -79.0

Source: YCharts

  • Chevron Corp.: Chevron is a global integrated energy company that is engaged in the exploration, development, production, transportation, and refining of crude oil and natural gas. Chevron recently agreed to acquire Noble Energy Inc. (NBL) in an all-stock transaction valued at $5 billion.
  • Pioneer Natural Resources Co.: Pioneer Natural Resources is an oil and gas exploration and production company focused primarily on the West Texas Permian Basin.
  • Cabot Oil & Gas Corp.: Cabot Oil & Gas develops and explores oil and gas properties throughout North America, including in Texas, the Rocky Mountains, and Western United States. At the end of April, the company reported a decline in net income of 79.5% and a drop in operating revenues of 39.8% for Q1 2020, which ended March 31, 2020. Cabot noted that the company experienced an unexpected loss in demand due to the coronavirus pandemic, but expects the supply and demand balance to improve later in the year and into 2021.

Energy Stocks with the Best Performance

These are the energy stocks that had the 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 (%)
Hess Corp. (HES) 52.09 16.0 -12.0
Cabot Oil & Gas Corp. (COG) 18.48 7.4 -15.5

Williams Companies Inc. (WMB)

19.45 23.6 -23.4
S&P 500 N/A N/A 11.6
Energy Select Sector SPDR ETF (XLE) N/A N/A -40.2

Source: YCharts

  • Hess Corp.: Hess is a global energy company engaged in the exploration, development, marketing, refining, and transportation of natural gas and crude oil products. In early May, the company reported a net loss of $2.4 billion on a 14.4% decline in revenue for the quarter ended March 31, 2020. Due to the significant decline in crude oil prices, Hess noted that it recorded a number of impairment charges related to its oil and gas properties.
  • Cabot Oil & Gas Corp.: See above for company description.
  • Williams Companies Inc.: Williams Companies is an energy infrastructure company operating natural gas pipelines across North America.