The energy sector is comprised of companies focused on the exploration, production, and marketing of oil, gas, and renewable resources around the world. The sector includes upstream firms that are primarily engaged in the exploration of oil or gas reserves. Well-known companies in this group include Occidental Petroleum Corp. (OXY) and EOG Resources Inc. (EOG).
Downstream companies that include HollyFrontier Corp. (HFC) refine and process oil and gas products for delivery to consumers . As represented by the Energy Select Sector SPDR ETF (XLE), the energy sector has lost 2.4% in the trailing 12-month period while the S&P 500, which has climbed by 27.0%.1 These market performance numbers and the statistics in the tables below are as of January 24.
In spite of slow growth across the energy sector as a whole, a handful of individual companies have thrived. Below we’ll look at 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 sector 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.
Devon Energy Corp.: Devon Energy is an upstream company focused on the exploration and development of oil and gas resources, with the majority of business interests located in the central United States. In December 2019. it announced the sale of assets in the Barnett Shale, a major Texas oil-producing region, and simultaneously launched a $1 billion share repurchase program.
Cabot Oil & Gas Corp.: Cabot Oil & Gas develops and explores properties throughout North America, including locations in Texas, the Rocky Mountains, and Western United States.
ConocoPhillips Co.: ConocoPhillips, one of the largest energy companies in the United States, is engaged in the exploration, production, transportation, and marketing of crude oil, natural gas, and related products.
Fastest Growing Energy Stocks
These are the energy sector 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.
ConocoPhillips Co.: See above for company description.
Diamondback Energy Inc.: Diamondback Energy seeks the development, exploration, and exploitation of oil and natural gas resources in the energy-rich Permian Basin, located in Texas. On Jan. 7, the company announced that average daily production for Q4 2019 increased 5% from Q3 2019 and 65% from Q4 2018.3
Energy Stocks With the Most Momentum
These are the energy sector stocks that had the highest positive price change over the last 12 months.
Hess Corp.: Hess is a global energy company engaged in the exploration, development, marketing, refining, and transportation of natural gas and crude oil products.4 It recently announced the start-up of production in offshore Guyana’s Liza Field, which is expected to produce up to 120,000 barrels of crude oil per day.5
Kinder Morgan Inc.: Kinder Morgan owns and control pipelines used to transport various gas and oil products. Its operations are active across more than 150 terminals connected by 85,000 miles of pipeline.
ONEOK Inc.: ONEOK focuses exclusively on the gathering, processing, storage, and transportation of natural gas in the United States.