Symbolically and literally, the energy industry drives the world economy. As nations reopen their economies and shift consumption to carbon-free sources of energy, the rising prices of oil and natural gas present a fantastic opportunity to examine energy stocks to buy now in greater detail. Energy stocks are businesses or groups of businesses involved in the extraction, and refining of energy sources such as oil, etc.
This article gives detailed explanations of the best energy stocks to buy now
Best Energy Stocks
Energy companies that produce and supply energy to the rest of the economy are the source of the stocks in the energy sector. They may also consist of businesses that aid energy producers with equipment and services.
How to Buy Energy Stocks
A tax-advantaged retirement account, such as an individual retirement account (IRA), or a taxable brokerage account both allow you to purchase energy stocks. You can use your preferred brokerage platform to buy individual companies’ stocks after conducting thorough research on the energy sector.
Just remember that picking individual stocks is a risky bet, even in the energy sector. If you look at the range of returns in the companies listed above, you’ll see that some have performed significantly better than others. Because of this, experts advise diversifying your investment portfolio.
It is recommended that you choose tens, hundreds, or even thousands of stocks to invest in rather than just a few. This enables you to benefit from the high points of numerous businesses without becoming bogged down by the drawbacks of a select few. This is meant to give you steadily increasing returns over time.
Best Energy Stocks to Buy Now
#1. Exxon Mobil Corp (XOM)
The biggest energy company in the world that is not owned by the government is ExxonMobil. ExxonMobil is a Fortune 500 company with headquarters in Irving, Texas. Its primary businesses include the exploration, production, and trading of crude oil and natural gas as well as the production of petroleum products. This is one of the best energy stocks to buy now in 2023.
Similar to Chevron, ExxonMobil (NYSE: XOM), another energy behemoth with a market cap of nearly $450 billion, is profitable and adept at generating cash flow. Its diversified business operations and emphasis on cost control allowed it to continue operating and paying dividends even when oil prices were low.
Exxon would be paying close to record prices for its shares at its current price of about $110 per share, but the integrated oil and gas giant is receiving a rock-bottom price for the stock at just 9 times earnings and 10 times free cash flow.
Furthermore, Exxon is moving forward. It expects to invest between $20 billion and $25 billion in capital projects each year to maintain production at about 3.7 million barrels of oil equivalent per day in 2019. Exxon predicts that profits and cash flows will increase by 2027, assuming a price of $60 per barrel.
#2. TotalEnergies SE (TTE)
TotalEnergies, the biggest energy company in France, was established in 1924 as an oil and gas company. The company’s current core business is the discovery, exploitation, and refinement of oil and gas. This European integrated oil and gas producer is shifting toward renewable energy as the rest of the world does.
The French company is expanding the size of its large solar and wind farms as part of its energy generation portfolio. However, it has no plans to abandon fossil fuels anytime soon. The company revealed on December 19 that it and its associates had been awarded a fresh exploration license in a petroleum-rich basin in Brazil. Total Energies is one of the best energy stocks to buy now.
#3. ConocoPhillips (COP)
Various oil and natural gas producers include ConocoPhillips. It operates globally and employs a variety of techniques to produce gas and oil. ConocoPhillips is unique in that it has low operating expenses. The Houston, Texas-based energy company ConocoPhillips specializes in oil and gas exploration and production (E&P), which is the first stage of the production of hydrocarbons. It is the largest independent E&P company in the world.
This global energy giant finds new oil and gas reserves while also creating cutting-edge technologies to get more energy from the ones it already has. Its stock performance and prospects have improved as a result of the uptick in oil demand because it can now sell more of its production.
#4. Chevron Corp (CVX)
One of the top energy companies worldwide is Chevron. It boasts a fully integrated oil and gas business with assets for exploration and production, petrochemical production, and refining. Chevron is still a traditional oil company and continues to offer a sizable dividend yield of 5.16%.
The business can withstand the energy sector’s volatility thanks to its extensive and integrated operations. The company’s current prospects have benefited from the recent improvement in travel and the global economy, and it is also investing in upcoming low-carbon energy projects like renewable jet fuel.
Chevron’s overall goal is to meet the current economy’s fuel needs while laying the groundwork for the future economy’s need for lower-carbon fuels. It is the perfect option for investors looking for a way to invest in the energy transition away from fossil fuels and toward cleaner substitutes because of the balance. If you’re looking for an outstanding long-term income investment, Chevron (NYSE: CVX) is a wise choice.
It has taken a tactical position with low-breakeven assets to effectively deliver strong cash flows regardless of the state of the economy. It has a 35-year history of increasing dividend payouts. By including Chevron in your portfolio, you’ll minimize your risk and increase your chances of long-term success.
#5. Epsilon Energy Stocks
Houston, Texas-based Epsilon Energy (NASDAQ: EPSN), a prominent energy stock involved in independent oil and natural gas extraction, is operating under the radar. The company focuses on on on-shore projects. EPSN is a remarkable business, as shown by its strong profit margins, outstanding balance sheet, and astronomical revenue growth.
ESPN’s operational performance is far superior to that of its competitors, with a return on equity of 40.5%. Furthermore, it has a remarkable dividend yield of over 4%. EPSN offers the savvy investor a fascinating opportunity for fruitful returns.
#6. Valero
The impressive refinery portfolio of Valero Energy (NYSE: VLO) has cemented its position as a pioneer in the international energy industry. With refineries in both North America and the United Kingdom, it is a global powerhouse in the industry. In addition, their commitment to offering resources that meet strict production and sustainability standards has helped them rise to the top of the energy industry.
Its refinery margins have significantly risen as a result of crucial market fundamentals and ideal timing, enabling it to further increase its bottom line. With fuel demand skyrocketing as the domestic economy has begun to recover, older production infrastructure is now more dependent than ever on it.
Valero had a successful year in 2022, finishing with fourth-quarter results that exceeded forecasts and generating a net income of $11.5 billion off of $176 billion in revenues. The previous year’s earnings for Valero were $930 million in net income and $114 billion in revenue.
Valero is well-liked by analysts due to its premium refining assets and aggressive margins. In addition to maintaining its focus on margin efficiency, the company is also investing in renewable diesel, which has the potential to be a strong source of future growth. The fact that Valero is dedicated to returning 40% to 50% of its operating cash flow to shareholders appeals to investors.
#7. Diamondback
The Permian Basin in West Texas and New Mexico, one of the most active oil-producing regions in the United States, is where Diamondback Energy concentrates its production. Because the company’s shares have lagged behind the larger energy sector, they may have more upside potential than some other energy companies.
#8. Cheniere
Cheniere is a provider of liquefied natural gas. In the energy industry, the company has “one of the best management teams and capital allocators,” according to Thummel. “Cheniere is a prime example of the beneficial effects the American energy sector has had over the past ten years. To become the biggest US LNG exporter, Cheniere changed from being a potential LNG importer.
#9. Vital Energy Inc.
A company called Vital Energy focuses on the Permian Basin in West Texas for its oil and natural gas exploration and development. In January 2023, Vital Energy, Inc., which had previously been known as Laredo Petroleum Inc., underwent a name change.
The fourth quarter and full year of 2022 saw Vital Energy post quarterly and annual net income highs.
#10. BP PLC (BP)
With a 4.86% dividend yield, energy giant BP is available. The company also owns offshore wind interests in the U.S. and U.K. and aims to develop 50 GW of renewable generating capacity by 2030. BP generates one of the best production outlooks of international oil companies. While BP’s primary business is still producing hydrocarbons, which is still doing well in light of the skyrocketing cost of energy, the company is currently making a significant transition to the production of renewable energy with the stated objective of producing no carbon at all in the year 2050.
#11. Ypf Energy Stocks
The main state-run oil company in Argentina is YPF (NYSE: YPF). YPF recently experienced a revival following years of adversity. In addition to having top-notch oil reserves, the company also runs extensive pipelines and produces natural gas. This diversifies the business and lowers its risk if oil prices fall.
The oil and gas exploration and production company YPF is based in Argentina. Additionally, it participates in downstream activities. The company’s largest shareholder is the government of Argentina, and YPF is the top revenue-producing business in the nation.
YPF stock has increased by almost 200% in the last 12 months. Yes, the business is Argentinean, and it carries the political risk that comes with holding assets there. However, a sizable energy company with a diverse business strategy and substantial shale reserves merits trading at a much higher P/E ratio.
#12. Equinor ASA (EQNR)
67% of the shares of Equinor are owned by the government of Norway. To place more emphasis on its future as a provider of renewable energy than its history as an oil and gas company, the company dropped the word “oil” from its name in 2018.
On the continental shelves of Norway, the United Kingdom, Brazil, the United States, and Nigeria, Equinor manages significant offshore oil and gas projects. Although the company also runs several significant European pipelines, wind, solar, and hydropower projects are where it sees its future growth.
#13. Enbridge Inc. (ENB)
Calgary, Alberta, is the home of Enbridge Inc., a highly diversified energy infrastructure firm. It runs oil and gas pipelines across the U.S. and Canada, and a sizable portion of its earnings comes from the transportation, storage, and refining of natural gas. Enbridge has assets for the generation of electricity from geothermal, solar, and wind energy.
#14. EOG Resources Inc. (EOG)
A Houston-based oil and gas company called EOG Resources offers a dividend yield of 1.96% and has a solid balance sheet. A special $1 per share dividend and a $0.4125 per share quarterly dividend were both announced by the company during the first quarter, totaling $1.5 billion in annual cash returns to shareholders.
Best Energy Stocks for Inflation
#15. Occidental (OXY)
Oil and gas properties are acquired, explored, and developed by Occidental in the United States, the Middle East, and Africa.
In 2019, OXY completed a sizable acquisition that depleted cash, increased debt on the balance sheet, and interfered with dividend payments to shareholders. The business suffered a sizable loss in 2020, as did many energy stocks, but it now seems to be heading in the right direction.
Revenues for OXY in 2021 were close to $26 billion, and the company earned $1.5 billion in net income. The business bought back nearly 42 million shares during the first three quarters of 2022, paying off 34% of its outstanding debt. The quarterly dividend for Occidental also increased, going from $0.01 in 2021 to $0.13 in the first quarter of 2022.
What Is the Best Energy ETF to Buy Right Now?
- The Vanguard Energy ETF (VDE)
- United States Oil ETF (USO)
- SPDR Fund for the Energy Select Sector (XLE)
- Oil and gas exploration and production SPDR S&P ETF (XOP)
- VanEck Oil Services ETF (OIH)
- Global X Renewable Energy Producers ETF (RNRG)
- Qualified Green Energy Index Fund from First Trust (QCLN)
- These three funds are the Invesco Dynamic Energy Exploration & Production ETF, the iShares U.S. Oil & Gas Exploration & Production ETF, and the Energy Select Sector SPDR Fund.
What Is the Richest Energy Company?
- Saudi Arabian Oil Co. (Saudi Aramco)
Revenue (TTM): $590.3 billion
Net Income (TTM): $156.5 billion
Market Cap: $1.8 trillion
1-Year Trailing Total Return: -3.7%
Exchange: Saudi Arabian Stock Exchange
The companies Clearway Energy Inc., NextEra Energy, and Brookfield Renewables.
Advantages of Investing in Energy Stocks
A sizeable market that is essential to the world economy. A significant portion of the economy, the energy sector generates trillions of dollars annually. The need for electricity in the global economy has resulted in a steady, long-term demand for the energy sector.
#1. Possibility of Substantial Dividends or Company Expansion.
Energy companies can profit when energy prices rise, earning significantly more money per barrel of oil even though their costs remain roughly the same. They have the opportunity to invest for future growth or to increase dividend payments to shareholders.
#2. High Global Demand
The need for energy will increase as developing nations like China and India continue to advance. This indicates that there will be a substantial demand in the future for both traditional energy sources like oil and gas as well as expanding demand for non-conventional sources.
#3. Wide Variety of Investments.
Even though they account for the majority of energy stocks by market cap, oil, and natural gas stocks don’t cover the entire industry. You can gain exposure to environmentally friendly stocks like solar or wind energy companies by making a diversified investment in the energy sector.
Conclusion
The global economy depends heavily on the energy sector. Without energy, the world would come to a complete standstill because no one could run cars, operate factories, or turn on devices.
The energy industry is facing a decision right now. Industry insiders are developing new approaches to reduce reliance on fossil fuels. Despite advances made in the use of renewable energy sources over time, our planet is still largely dependent on oil, coal, and natural gas.
Energy Stocks to Buy Now FAQs
What are Energy Stocks?
Energy stocks are businesses or groups of businesses involved in the extraction, and refining of energy sources such as oil, etc.
What Is the Best Energy ETF to Buy Right Now?
- The Vanguard Energy ETF (VDE)
- United States Oil ETF (USO)
- SPDR Fund for the Energy Select Sector (XLE)
- Oil and gas exploration and production SPDR S&P ETF (XOP)
- VanEck Oil Services ETF (OIH)
What are the Advantages of Investing in Energy Stocks?
- High Demand
- Offers a Variety of Investments
Related Articles
- GREEN ENERGY COMPANIES: 15 Best Green Energy Companies To Invest in The UK
- Stock Market Calculator: See how your Market can grow
- The Top 15 Healthiest ENERGY DRINKS BRANDS in the World (Updated)
- GOOD INVESTMENT STOCKS RIGHT NOW: How To Find Them In 2023!!!
- STOCK INVESTING FOR BEGINNERS: Best 2023 Practices (Detailed)
References
