The energy stocks with the best performance over the past 12 months include Argentine firm YPF SA, refiner PBF Energy Inc., and Texas liquefied natural gas transporter GasLog Partners LP, which have all risen well over 100% in the past year amid volatility in global oil markets. After peaking above $120 per barrel in the first half of 2022, crude oil prices have fallen below $80 per barrel in the early months of 2023.
Despite the impact of volatile prices on energy commodities, energy stocks as a group, represented by the Energy Select Sector SPDR ETF (XLE), have climbed 23.3% over the past 12 months, while the Russell 1000 Index has fallen 5.1% over the same period.
We look below at top energy stocks in three categories: best value, the fastest-growing, and those showing the most momentum in terms of 12-month return. All data is as of Feb. 23, 2023.
Best Value Energy Stocks
These are the energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. A low P/E ratio shows that you’re paying less for each dollar of profit generated. Profit can be returned to shareholders in the form of dividends and share buybacks.
|Best Value Energy Stocks|
|Price ($)||Market Capitalization ($B)||12-Month Trailing P/E Ratio|
|Vital Energy Inc.(VTLE)||50.80||0.9||1.2|
|Callon Petroleum Co. (CPE)||37.32||2.3||1.9|
|PBF Energy Inc. (PBF)||43.87||5.7||1.9|
- Vital Energy Inc.: Vital Energy is an oil and natural gas exploration and development company focused on the Permian Basin in West Texas. Formerly known as Laredo Petroleum Inc., the company changed its name to Vital Energy in January 2023. Vital Energy reported record quarterly and annual net income in the fourth quarter and full year of 2022.
- Callon Petroleum Co.: Callon Petroleum is an independent oil and gas company that also operates in West Texas. The company expects 2023 capital expenditures of $1 billion and expects to generate adjusted free cash flow of more than $2.75 billion over the next five years, which would equate to greater than 125% of its market capitalization.
- PBF Energy: PBF refines petroleum and sells transportation fuels, lubricants, heating oil, and feedstocks. In November 2022, PBF completed the purchase of the remaining half of PBF Logistics LP, an oil and petroleum products logistics company. In its earnings report for the fourth quarter of 2022, PBF reported that it had reduced its consolidated debt by more than $2.3 billion during the year and announced a partnership with Eni Sustainable Mobility on a renewable diesel project in Louisiana.
Fastest-Growing Energy Stocks
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax laws or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest-Growing Energy Stocks|
|Price ($)||Market Cap ($M)||EPS Growth (%)||Revenue Growth (%)|
|DMC Global Inc. (BOOM)||26.09||509||2,200||160|
|Vertex Energy Inc. (VTNR)||8.24||623||133||1,489|
|Kimbell Royalty Partners LP (KRP)||15.92||1,022||1,867||50|
- DMC Global Inc.: DMC Global provides building products, metal manufacturing services, and well-completion services. For the fourth quarter of 2022, DMC reported sales of $175.1 million, up 144% year over year. DMC's acquisition in December 2021 of a 60% controlling interest in architectural products company Arcadia positively affected growth last year.
- Vertex Energy Inc.: Vertex produces and distributes alternative and conventional fuels, including motor oil and base oils for lubricant manufacturers. It also recycles industrial waste streams. Net income nearly tripled as revenue soared almost 15-fold in the third quarter of 2022. A $48 million reversal of unrealized derivative losses and other non-recurring items affected profits in the third quarter.
- Kimbell Royalty Partners LP: Based in Fort Worth, Texas, Kimbell Royalty Partners owns royalty interests across 28 states, with a presence in every major onshore basin in the U.S. For the full year of 2022, Kimbell posted record net income and its highest-ever results for oil, natural gas, and natural gas liquids revenue.
Energy Stocks With the Most Momentum
These are the energy stocks that had the highest total return over the past 12 months.
|Energy Stocks With the Most Momentum|
|Price ($)||Market cap ($B)||12-Month Trailing Total Return (%)|
|YPF SA (YPF)||11.71||4.6||164|
|PBF Energy Inc. (PBF)||43.87||5.7||154|
|GasLog Partners LP (GLOP)||9.18||0.5||142|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||23.3|
- YPF: YPF is an Argentine oil and gas company that explores and produces petroleum products. It also engages in downstream operations. The government of Argentina is the largest stakeholder in the company, and YPF is the top revenue-generating company in the country.
- PBF Energy: See company description above.
- GasLog Partners: Based in Piraeus, Greece, GasLog Partners operates a fleet of 14 vessels that transport liquefied natural gas. GasLog said that liquefied natural gas "rescued Europe as energy supply dwindled in 2022" as a result of the war in Ukraine, and it forecasts similar conditions for 2023.
What the Supreme Court's EPA Ruling Means for Energy Stocks
In June 2022, the U.S. Supreme Court ruled to restrict the Environmental Protection Agency's (EPA) ability to limit carbon emission outputs from power plants. Instead, the EPA must now gain congressional approval before enacting sweeping climate change regulations. The decision targeted the Obama administration's Clean Power Plan (CPP), which had called for energy players to curb emissions by 32% from 2005 levels by 2030. Under the CPP, the EPA had the authority to remake the U.S. power system, shifting from fossil fuels to cleaner energy alternatives.
The ruling removes potential EPA regulatory challenges for coal, oil, and gas stocks that performed strongly in 2022 amid surging energy demand in the wake of the pandemic and the Russian invasion of Ukraine. However, the decision may present challenges for renewable energy stocks, many of which have struggled to gain traction despite clean energy being an integral part of President Joe Biden's policy agenda.
It remains unclear how much long-term upside the ruling will deliver fossil fuel producers, given the clear move worldwide to renewable clean energy. Moreover, many utilities already have implemented EPA environmental regulations, especially where it has made economic sense.
Advantages of Investing in Energy Stocks
Two key reasons to invest in the energy sector are the size of the market and the sector's recent returns.
Size of the market: Given that the world relies on energy to power everything from cars to factories and just about all else in between, it's not surprising that the value of the global energy market in recent years has been calculated at around $7 trillion. Furthermore, the International Energy Agency (IEA) expects global energy demand to grow by more than 30% by 2035. The energy market also offers many industries to invest in, including exploitation, storage, renewables, production, transportation, and distribution.
Recent returns: The trend is your friend, as they say on Wall Street. No sector epitomizes this saying more than energy stocks over the past year. The group leads every other area of the market by performance, having returned more than 23% over the past 12 months as of February 2023.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
YCharts. "Financial Data." (Subscription required.)
Yahoo! Finance. "Crude Oil Apr 23 (CL=F)."
Vital Energy. "Our History."
Vital Energy. "Company Issues 2023 Outlook; Plans to Invest $625 - $675 Million."
Callon Petroleum. "Callon Issues 2023 Capital Program and Outlook, Projected to Generate More Than $2.75 Billion in Adjusted Free Cash Flow Over the Next Five Years."
PBF Energy Inc. "PBF Energy Completes Acquisition of PBF Logistics."
PBF Energy. "PBF Energy Reports Fourth Quarter 2022 Results and Declares Dividend of $0.20 per Share and Announces Partnership for St. Bernard Renewables Project."
DMC Global. "DMC Global Reports Fourth Quarter and Full-Year Financial Results."
DMC Global. "DMC Global To Acquire 60% Controlling Interest in Arcadia Inc."
Vertex Energy Inc. "Vertex Energy Announces Third Quarter 2022 Results."
Kimbell Royalty Partners. "Investor Relations."
Kimbell Royalty Partners. "Kimbell Royalty Partners Announces Record Fourth Quarter and Full Year 2022 Results."
YPF. "Investor Presentation, November 2022," Page 4.
GasLog Partners. "Contact Us."
GasLog Partners LP. "Q4 2022 Results," Pages 4, 18.
Reuters. "U.S. Supreme Court Limits Federal Power To Curb Carbon Emissions."
Dummies. "10 Reasons to Invest in Energy."