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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 energy sector has been hit hard by the recent plunge in oil prices as Russia and Saudi Arabia plan to increase production amid weakening oil demand. Energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE), have dramatically underperformed the broader market, falling 48.4% compared to the S&P 500’s decline of 0.9% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 13.
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.
- HollyFrontier Corp.: Petroleum company HollyFrontier is involved in refining, storage, transportation, and more. The firm markets its products throughout North America. HollyFrontier announced in November 2019 that Chief Executive Officer (CEO), President and Director George Damiris would be stepping down at the end of the year. Michael Jennings was appointed to assume the roles of CEO and President, effective January 1, 2020.
- 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.
- Marathon Petroleum Corp.: Marathon Petroleum is a crude oil refining company. The company refines, markets, and transports petroleum products throughout the U.S.
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.
- Helmerich & Payne Inc.: Helmerich & Payne, a horizontal and directional driller, provides contract services at oil and gas wells in South America and the Gulf of Mexico.
- Kinder Morgan Inc.: Kinder Morgan is an energy infrastructure company that owns and operates pipelines that transport crude oil, natural gas, and other products. The company also operates energy storage facilities.
- Valero Energy Corp.: Valero Energy is a petroleum-refining and ethanol-producing company with 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. Valero Energy announced in January several promotions to senior management positions.
Energy Stocks with the Most Momentum
These are the energy stocks that had the highest total return over the last 12 months. All of these stocks have had negative total returns over the past year but they are the stocks whose prices have fallen the least amid a sector that has been hammered by falling oil prices.
- Kinder Morgan Inc.: See above for company description.
- Cabot Oil & Gas Corp.: Cabot Oil & Gas develops and explores oil and gas properties throughout North America, including locations in Texas, the Rocky Mountains, and Western United States. The company reported annual net income growth of 22.3% despite operating revenue falling 5.6% for 2019.
- Chevron Corp.: Chevron is an integrated energy company that provides administrative, financial management, and technology support for energy and chemical operations. The company is engaged in the exploration, development, production, transportation, and refining of crude oil and natural gas. Chevron announced in December that it had agreed to acquire Puma Energy (Australia) Holdings Pty Ltd. for the amount of AU$425 million.
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