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). XLE has risen from its bottom last year, and is now outperforming the broader market. It has provided a total return of 102.3% over the past 12 months, above the Russell 1000's total return of 79.4%. These market performance numbers and all statistics in the tables below are as of March 22, 2021.

Here are the top 3 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) 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
Equitrans Midstream Corp. ( ETRN) 8.22 3.6 8.2
Valvoline Inc. ( VVV) 26.28 4.8 14.8
ONEOK Inc. ( OKE) 48.49 21.6 34.9

Source: YCharts

  • Equitrans Midstream Corp.: Equitrans Midstream owns and operates midstream assets in the Appalachian Basin. The company manages natural gas transmission, storage, and gathering systems and lines. Equitrans Midstream announced in late February financial results for its 2020 fiscal year (FY), which ended Dec. 31, 2020. The company reported net income of $638.0 million compared to a net loss of $65.0 million in FY 2019. Operating revenue for the year fell 7.3%. Net income was boosted by operating expenses that fell to less than half their level in the previous year.
  • 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.
  • ONEOK Inc.: ONEOK focuses exclusively on the gathering, processing, storage, and transport of natural gas in the U.S.

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 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 (%)
Baker Hughes Co. ( BKR) 22.31 23.2 1,200 -13.4
Valvoline Inc. (VVV) 26.28 4.8 20.5 7.6
Williams Companies Inc. ( WMB) 22.99 27.9 -10.0 -0.7

Source: YCharts

  • Baker Hughes Co.: Baker Hughes provides oilfield products and services, including surface logging, drilling, pipeline operations, petroleum engineering, and fertilizer solutions. It also offers gas turbines, valves, pumps, and other related products. The company announced in February that it had agreed to acquire ARMS Reliability, a global provider of reliability solutions to a range of industries. Financial terms of the transaction, which is expected to close in Q2 2021, were not disclosed. Baker Hughes' EPS growth for the most recent quarter (see table above) received a significant boost from an unrealized gain on its investment in Inc., an enterprise AI software company.
  • Valvoline Inc.: See above for company description.
  • Williams Companies Inc.: Williams Companies is an energy infrastructure company operating natural gas pipelines across North America. It announced in late February financial results for FY 2020, which ended Dec. 31, 2020. Net income fell 72.3% as total revenue declined 5.9%. Net income for the quarter was adversely impacted by a significant impairment charge on equity-method investments. Williams Companies cited the pandemic and a highly active hurricane season as among the factors hurting its performance in 2020.

Energy Stocks with the Most Momentum

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 (%)
Antero Midstream Corp. ( AM) 8.85 4.2 374.0
Targa Resources Corp. ( TRGP) 32.01 7.3 348.7
Halliburton Co. ( HAL) 21.54 19.1 331.2
Russell 1000 N/A N/A 79.4
Energy Select Sector SPDR ETF (XLE) N/A N/A 102.3

Source: YCharts

  • 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. The company announced in mid-February financial results for FY 2020, which ended Dec. 31, 2020. Net income, including comprehensive income, was $76.5 million compared to a net loss of $144.6 million in FY 2019. Total revenue fell 14.7%. Comprehensive income includes unrealized income, such as unrealized gains or losses on hedge/derivative financial instruments and foreign currency transaction gains or losses. Net income was boosted by significantly lower operating expenses compared to the previous year.
  • Targa Resources Corp.: Targa Resources provides midstream natural gas and natural gas liquids services. The company gathers, compresses, treats, process, and sells natural gas. It also stores, fractionates, treats, transports, and sells natural gas liquids and related products.
  • Halliburton Co.: Halliburton provides engineering and construction services and manufactures products for customers in the energy industry.

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