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 Hess Corp. (HES) and Diamondback Energy Inc. (FANG). Downstream companies include CVR Energy Inc. (CVI), 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, sharply pushing down energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE). The XLE has rebounded more than 60% since then. Even with that recovery, the XLE has dramatically underperformed the broader market, posting a total return of -30.8% compared to the S&P 500's return of 9.9% over the past 12 months. These market performance numbers and the statistics in the tables below are as of May 28, 2020.
Here are the top 3 energy stocks with the best value, the fastest earnings 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|
|Market Cap ($B)||12-Month Trailing P/E Ratio|
|EOG Resources Inc. (EOG)||52.73||30.7||14.5|
|Exxon Mobil Corp. (XOM)||46.24||195.6||17.3|
- ConocoPhillips: ConocoPhillips is an oil exploration and production company engaged in the processing, refining, and marketing of crude oil, natural gas, and petroleum products. The company has operations throughout the world. On May 20, the company announced that its Chief Financial Officer (CFO), Don E. Wallette, would be stepping down as of August 31.
- 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; although it also has holdings in Canada, China, and the Republic of Trinidad and Tobago. On May 7, the company announced net closures of approximately 150 oil wells due to the recent decline in oil prices.
- Exxon Mobil Corp.: Exxon Mobil, one of the largest integrated energy companies, has exploration and production operations throughout the world. It also makes and sells chemicals. On May 1, the company announced it had incurred a $610 million loss in Q1 2020 stemming from the recent oil price collapse.
Fastest Growing Energy Stocks
These are the energy stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Energy Stocks|
|Market Cap ($B)||EPS Growth (%)|
Chevron Corp. (CVX)
Pioneer Natural Resources Co. (PXD)
|Cabot Oil & Gas Co. (COG)||20.33||8.1||-79|
- Chevron Corp.: Chevron is a major integrated energy company that primarily is engaged in the exploration, development, production, transportation, and refining of crude oil and natural gas. On May 27, the company announced details of its COVID-19 response plan, including new efforts to screen employees and visitors to company facilities.
- Pioneer Natural Resources Co.: Pioneer Natural Resources is an oil and gas exploration and production company focused primarily on the West Texas Permian Basin. On March 16, the company announced plans to substantially reduce capital expenditures to bolster its finances in the face of declining oil prices.
- Cabot Oil & Gas Co.: Cabot Oil & Gas develops and explores oil and gas properties throughout North America, including in Texas, the Rocky Mountains, and Western United States. On its Q1 FY 2020 report released on April 30, the company said it expected economic conditions to improve in 2021.
Energy Stocks with the Most Momentum
These are the energy stocks that had the highest total return over the last 12 months. Two of the three stocks below have negative total returns over the past year, but these stocks have fallen the least in a sector that's been hurt by falling oil prices.
|Energy Stocks with the Most Momentum|
|Market Cap ($B)||12-Month Trailing Total Return (%)|
|Phillips 66 (PSX)||81.73||35.7||2.5|
Valero Energy Corp. (VLO)
|Hess Corp. (HES)
|S&P 500 (SPY)||N/A||N/A||9.9|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||-30.8|
- Phillips 66: Phillips 66 is a refiner and logistics service provider for oil and gas producers. Through a network of 13 refineries, it sells refined petroleum products primarily in the United States and Europe. On May 1, the company issued a press release advising its shareholders to reject a mini-tender offer from Canadian investment firm TRC Capital Corporation.
- 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. On April 14, 2020, Valero announced $1.5 billion in new debt offerings.
- Hess Corp.: Hess Corp is an explorer and producer of oil and natural gas, with operations centered primarily in the United States, Denmark, and Malaysia. In addition to its own production activities, it also provides support services to the American shale oil industry. On May 7, the company announced it had reduced its 2020 budget for exploration and capital investment by 37%.
YCharts. "Financial Data," Accessed May 28th, 2020.
ConocoPhillips. “ConocoPhillips Announces Don E. Wallette, Jr. to Retire After 39 Years with the Company,” Accessed May 28th, 2020.
Reuters. “EOG Resources to shut existing wells, deepens 2020 budget cuts,” Accessed May 28th, 2020.
Exxon Mobil. “ExxonMobil reports results for first quarter 2020,” Accessed May 28th, 2020.
Chevron Corp. “Chevron Discusses Business Operations at Annual Stockholders Meeting,” Accessed May 28th, 2020.
Pioneer Natural Resources. “Pioneer Natural Resources Announces 2020 Capital Spending Reduction, Prioritizing Balance Sheet Strength and Free Cash Flow Generation,” Accessed May 28th, 2020.
Cabot Oil & Gas Co. “Cabot Oil & Gas Corporation Reports First Quarter 2020 Results, Announces Reaffirmation of Borrowing Base,” Accessed May 28th, 2020.
Phillips 66. “Phillips 66 Recommends Rejection of Mini-Tender Offer by TRC Capital Corporation,” Accessed May 28th, 2020.
Valero Energy Corp. "Valero Energy Corporation Announces Pricing of Notes Offering," Accessed May 28th, 2020.
Hess Corp. “Hess Reports Estimated Results for the First Quarter Of 2020,” Accessed May 28th, 2020.