We might need more natural gas if the globe continues to move away from oil. Since a complete switch to solar or wind power isn’t possible, natural gas, the cleanest fossil fuel, can be used as a bridge fuel to get to solar and wind power. There are several opportunities for investment in the natural gas and energy sectors due to the varied stages of production. If you’re trying to decide where to put your money in 2023, we’ll look at the best natural gas ETF and liquefied gas stocks to buy that you should be aware of right now.
Natural Gas Stocks to Buy
Even though we have written about renewable energy stocks, the globe still uses natural gas. Natural gas, in general, and LNG, are in higher demand. Let’s look at the best natural gas stocks to invest in 2023.
#1. Black Stone Minerals (BSM)
Black Stone Minerals (NYSE: BSM), a Houston, Texas-based company, is focused on purchasing various mineral and royalty properties. So far, Black Stone has dramatically benefited from the distinctive dynamics of the post-pandemic new normal. BSM has increased its stock value by 65% since the year began. The company’s market capitalization as of right now is $3.7 billion.
A strong balance sheet and impressive growth indicators make Black Stone one of the best natural gas stocks to buy in 2023. Its net margin of 60.3% outperforms the sector’s average of 93%. Investors will nonetheless fork up more money for BSM. However, it’s essential to recognize the tremendous momentum that top-notch hydrocarbon firms possess.
#2. Matador Resources (MTDR)
Matador Resources is a Texas company with its headquarters in Dallas. It trades on the New York Stock Exchange (NYSE) under the ticker symbol MTDR. MTDR has increased by a startling 74% since the beginning of this year. Shares increased 49% just in the previous month. Matador has an $8 billion market valuation as of this writing.
The primary factors that make MTDR one of the best natural gas stocks to buy in 2023 have now been discussed. Matador outperformed 87% of its competitors with a three-year sales growth rate of 20.8%.
#3. Texas Pacific Land (TPL)
Texas Pacific Land (NYSE: TPL), a publicly traded real estate operating business, holds about 880,000 acres in West Texas. One of Texas’ biggest private landowners, it focuses on various hydrocarbon projects. TPL has increased by a startling 70.3% since the beginning of this year. Additionally, it has recently been on a roll, rising by more than 33% in the preceding month.
To be transparent with investors, Gurufocus declares its shares to be “highly overvalued,” cautioning them that they will pay more for this growth track. TPL is currently trading at more than 40 times projected earnings. The median level, in contrast, is only 6.6 times. However, due to its solid financial standing in 2023, Texas Pacific is one of the best natural gas stocks to buy.
#4. Canadian Natural Resources (CNQ)
Consider Canadian Natural Resources if you’re seeking a well-rounded prospect among the best natural gas stocks to buy (NYSE: CNQ). Shares of CNQ, a reputable oil and gas company, have increased by more than 37% since the year’s start. The trailing month saw a 32% increase in CNQ. The corporation is currently valued at $68.5 billion.
Gurufocus claims that CNQ is an investment that is “reasonably valued.” There won’t be many complaints about this evaluation, which has average ranks for earnings multiples. However, the company’s balance sheet is reasonably steady. It also performs well in terms of growth and profitability. Finally, CNQ is a top-notch company with a 30.7% return on equity. It’s one of the best natural gas stocks you’ll find overall in 2023.
#5. Diamondback Energy (FANG)
Diamondback Energy (NASDAQ: FANG), which has its headquarters in Midland, Texas, is an expert in hydrocarbons and specializes in exploration. Natural gas liquids are all involved, sometimes known as NGLs, petroleum, and natural gas. FANG has increased its equity value by a healthy 37% since the start of this year. Shares skyrocketed in the preceding month by over 38%. The company’s market capitalization at the moment is $27.2 billion.
FANG is a “modestly undervalued” investment, claims Gurufocus. As of this writing, its P/E ratio is 7.2 times. This is significantly less than the industry median, around 9 times. However, the company’s high growth and profitability indicators in 2023 catch people’s attention as one of the best natural gas stocks to buy.
Liquefied Natural Gas Stocks
We are aware of the recent surge in liquefied natural gas stock prices. Additionally, gas costs remain high nationwide. But the primary cause is that demand is rising while supply is declining.
There are a few additional causes for the rise in liquified natural gas stocks, though. One of the most significant energy sources in the world is natural gas. Additionally, it burns cleanly. It powers industry, heats houses, and produces energy.
In 2023, liquefied natural gas stocks can be purchased in various ways. It can be explored, developed, and produced by firms you can buy. Or you might spend money on the distribution and transportation infrastructure.
What is the best method to capitalize on the escalating demand? Invest in the stocks of companies engaged in manufacturing, shipping, and distribution. Here are the top liquefied natural gas stocks to watch in 2023 if you’re interested in investing.
#1. Shell Plc
- Dividend: Approx. 4%
Shell Plc is one of the world’s most extensive liquefied natural gas stocks. And it takes part in every aspect of it. Everything from discovery and manufacturing to movement and distribution
The business is well-established in North America, Europe, and Asia. Shell operates in Mexico, the United States, and Canada in North America. Additionally, it conducts business in six nations in Asia and seven in Europe. Even certain regions of Africa, too.
Shell is undoubtedly a very varied organization. The corporation has diversified holdings in producing natural gas, oil, and electricity. Additionally, it engages in sustainable energy, with a heavy emphasis on renewable energy.
#2. Cheniere Energy Inc.
- Dividend: Approx. 1%
The American energy firm Cheniere Energy Inc. is headquartered in Houston, Texas. It is involved in businesses connected to liquefied natural gas (LNG). And a few of those are electricity production, natural gas marketing, and terminal operations. Cheniere was the first business to export liquefied natural gas from the United States.
Since March 2020, this liquified natural gas stock has increased by approximately 400% and is now a Fortune 500 firm. Cheniere Energy has received numerous honors. One of their accomplishments came in 2018 when the Global Platts Energy Award named it “Company of the Year.”
#3. TotalEnergies SE
- Dividend: None
TotalEnergies is a French oil and gas company that was founded in 1924. This one is one of the world’s seven “supermajor” oil firms.
Since COVID-19 struck, this liquefied natural gas stock has been rising. Before COVID-19, TotalEnergies did not feel very energized. But current circumstances have increased demand for liquefied natural gas. Also, the stock is set up well to benefit from the growing demand for this fuel that burns cleanly.
#4. Chesapeake Energy Ord. Shares
- Dividend: Approx. 7%
Chesapeake Energy Corporation is an American oil and gas exploration and production firm. It was one of the top businesses in the fracking sector after its 1989 founding. The second-largest natural gas producer in the US is Chesapeake.
The business has lately experienced significant difficulties and will file for Chapter 11 bankruptcy in 2020. But since it first went public in 2017, the value of its stock has increased. Therefore, according to many experts, Chesapeake is well-positioned for future success. This liquefied natural gas stock can be among your top picks if you’re looking to buy stocks in 2023.
#5. Occidental Petroleum Corporation
- Dividend: Approx. 1%
American oil and gas exploration and production firm Occidental Petroleum Corporation has activities in the Middle East, Latin America, and the United States. It is also one of the country’s oldest oil and gas companies. It was founded in 1920. With a market capitalization of around $65 billion, Occidental Petroleum is a sizable organization.
All of the above stocks in liquefied natural gas will benefit from the rise in demand for this fuel. Investors should take into account the distinct operations and advantages of each organization. As always, do your research and due diligence before making any financial decisions. There are many ways to invest your money, and these liquefied natural gas stocks for 2023 are just one of them.
Natural Gas Stocks ETF
According to our experts’ recommendations, the best natural gas stocks ETF may be seen below. Scroll down to learn more about how each was chosen.
3 Best-Performing Natural Gas Stocks ETF
#1. United States Natural Gas Fund (UNG)
- Information collected date: October 6, 2021
- Performance over One-Year: +83.5%
- Expense Ratio: 1.35%, or $135 annually for every $10,000 invested
- Annual Dividend Yield: N/A
- Three-Month Average Daily Volume: 5.28M shares per day
- Total Net Assets: $442M
- Inception Date: April 18, 2007
- Issuer: Concierge Technologies
- Ticker: UNG
- Primary Exchange: NYSE Arca
A continuous portfolio of NYMEX natural gas futures contracts with expiration dates in the next month makes up the United States Natural Gas Fund, an ETF set up as a commodities pool and intended to monitor natural gas price changes.
#2. United States 12 Month Natural Gas Fund (UNL)
- Information collected date: October 6, 2021
- Performance over One-Year: +79.0%
- Expense Ratio: 0.90%, or $90 annually for every $10,000 invested
- Annual Dividend Yield: N/A
- Three-Month Average Daily Volume: 23.9K shares
- Total net assets: $18.5M
- Inception Date: Nov 18, 2009
- Issuer: Concierge Technologies
- Ticker: UNL
- Primary Exchange: NYSE Arca
A continuous portfolio of NYMEX natural gas futures contracts covering the upcoming 12 months makes up the United States 12 Month Natural Gas Fund, an ETF set up as a commodities pool and intended to track natural gas price changes.
#3. iPath Series B Bloomberg Natural Gas Subindex Total Return ETN (GAZ)
- Information collected date: October 6, 2021
- Performance over One-Year: +77%
- Expense Ratio: 0.45% or $45 annually for every $10,000 invested
- Annual Dividend Yield: N/A
- Three-Month Average Daily Volume: 12,100
- Total Assets Under Management: $14M
- Inception Date: March 8, 2017
- Issuer: Barclays
- Ticker: GAZ
- Primary Exchange: NYSE Arca
In contrast to the first two entries, the iPath Series B Bloomberg Natural Gas Subindex Total Return ETN, or GAZ, is a distinct kind of asset. Exchange-traded notes, or GAZ, are a kind of unsecured debt asset that does not bear interest and instead pays the return of the index they monitor when they mature.
What is the Best Natural Gas Stock?
The closing on October 12, 2022, is the basis for all stock prices.
- Kinder Morgan Inc. (KMI)
- Cheniere Energy (LNG)
- EQT Corporation (EQT)
- Shell Plc (SHEL)
- DCP Midstream, LP (DCP)
- Coterra Energy (CTRA)
- Range Resources Corporation (RRC)
Is Natural Gas Stock a Good Investment?
Stock market investors may want to consider purchasing natural gas stocks ETF. This is because it is anticipated that natural gas costs will increase going forward. Nevertheless, purchasing natural gas stocks through an ETF also carries significant dangers.
What are the Top 5 Producers of Natural Gas?
Leading Natural Gas Producers by Nation (Updated 2023)
- United States. Production: 934 billion cubic meters.
- Russia. Production: 701.7 billion cubic meters.
- Iran. Production: 256.7 billion cubic meters.
- China. Production: 209.2 billion cubic meters.
- Qatar. Production: 177 billion cubic meters.
What are the Best Gas Stocks To Buy?
The Energy Select Sector SPDR ETF (XLE) best represents the oil and gas sector. The exchange-traded fund outperformed the Russell 1000’s -17.0% total return by a wide margin, with a total return of 43.5% over the past year.
Who is the #1 Natural Gas Producer?
- United States-32,914,647,000
- Russia-22,728,734,000
- Iran-9,097,956,245
- Canada-6,751,698,275
Who is the Biggest Natural Gas Company?
The United States
Natural gas production in the world is dominated by the United States, followed by Russia, Iran, China, Qatar, and Canada. China National Petroleum (PetroChina) is the world’s largest oil and gas firm in terms of revenue.
Conclusion
Since prices are still affected by ongoing international conflicts, it’s essential to know the risks of investing in the natural gas and energy sectors. Concerns about a possible global recession are also growing because Russia’s invasion of Ukraine has caused inflation and fuel prices to go up.
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