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 Chesapeake Energy Corp. (CHK). 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 2020 and sharply pushed down energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE). The oil market may be poised for further volatility, as OPEC Plus reached a deal in mid-July to increase production beginning next month. XLE has risen from its bottom last year, and is now slightly underperforming the broader market. XLE has provided a total return of 37.6% over the past 12 months, just below the Russell 1000's total return of 38.1%. These market performance numbers and all statistics in the tables below are as of July 16, 2021.
Here are the top 3 energy stocks with the best value, the fastest growth, and the 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 you’re paying less for each dollar of profit generated.
|Best Value Energy Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Antero Midstream Corp. (AM)||9.68||4.6||13.3|
|Valvoline Inc. (VVV)||30.41||5.5||16.7|
|ONEOK Inc. (OKE)||53.31||23.8||20.6|
- Antero Midstream Corp.: Antero Midstream owns, develops, and operates midstream energy assets. The company provides gathering pipeline safety, and related services across North America. On April 28, the company reported $83 million in net income on rising revenue for Q1 2021 compared to a loss a year earlier. Cost reductions were a key driver of the improved results.
- 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. On July 19, the company announced a quarterly dividend of $0.125 per share of common stock, payable on Sept. 15 to shareholders of record as of Aug. 30, 2021.
- ONEOK Inc.: ONEOK is a diversified energy company with operations across the U.S. It is a midstream energy company focused on the natural gas space.
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Cabot Oil & Gas Corp. (COG)||16.16||6.5||138.5||19.0|
|Valvoline Inc. (VVV)||30.41||5.5||12.1||21.3|
|Cheniere Energy Inc. (LNG)||83.56||21.2||7.7||14.1|
- Cabot Oil & Gas Corp.: Cabot Oil & Gas is an oil and gas company that develops and explores properties in North America. The company maintains interests in Texas, Louisiana, the Rocky Mountains, and the Appalachian and Anadarko Basins, as well as in Canada. The company announced on May 24 that it would combine with Cimarex Energy Co. (XEC) in an all-stock merger of equals. The enterprise value of the combined company is approximately $17 billion. The transaction is expected to close in the last quarter of 2021 and will result in a company operating under a new name.
- Valvoline Inc.: See above for company description.
- Cheniere Energy Inc.: Cheniere Energy owns and operates liquefied natural gas pipelines and terminals in Louisiana and Texas.
These are the energy stocks that had the highest total return over the last 12 months.
|Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Cimarex Energy Co. (XEC)||66.08||6.8||159.9|
|Devon Energy Corp. (DVN)||25.78||17.5||157.7|
|Texas Pacific Land Corp. (TPL)||1415.70||11.0||147.6|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||37.6|
- Cimarex Energy Co.: Cimarex is a crude oil and natural gas exploration and development company. It's engaged in drilling, completing and operating wells in states including Oklahoma, Texas and New Mexico. As indicated above, Cimarex will combine with Cabot Oil & Gas in an all-stock merger.
- 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.
- Texas Pacific Land Corp.: Texas Pacific Land Corp. is a land trust which owns roughly 900,000 acres in West Texas. The company is not an oil and gas firm, but it generates revenue from fees paid by energy companies to use the land and from royalties.
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New York Times. "OPEC Plus Agrees on Oil Production Increase, Easing Pressure on Supplies and Prices." Accessed July 19, 2021.
YCharts. "Financial Data." Accessed July 19, 2021.
Antero Resources. "Antero Midstream Announces First Quarter 2021 Financial and Operational Results." Accessed July 20, 2021.
Valvoline Inc. "Valvoline Declares Quarterly Dividend." Accessed July 19, 2021.
Cabot Oil & Gas Corp. "Cabot Oil & Gas and Cimarex Energy to Combine in All-Stock Merger of Equals." Accessed July 19, 2021.