MPC, COP, and DVN are top for value, growth, and momentum, respectively
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 are Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK). Downstream companies include HollyFrontier Corp. (HFC), which refines and processes oil and gas products for delivery to consumers.
The benchmark Energy Select Sector SPDR ETF (XLE) has slightly underperformed the broader market in the last year. XLE has provided a total return of 33.1% over the past 12 months, just below the Russell 1000’s total return of 34.2%. These market performance numbers and all statistics in the tables below are as of Aug. 20, 2021.
Here are the top 3 energy stocks with the best value, the fastest growth, and the most momentum.
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.
|Best Value Energy Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Marathon Petroleum Corp. (MPC)||54.77||35.0||4.7|
|APA Corp. (APA)||16.07||6.1||9.0|
|Antero Midstream Corp. (AM)||8.90||4.2||12.4|
- Marathon Petroleum Corp.: Marathon is a crude oil refining company. Serving customers across the U.S., the company refines, supplies, transports, and sells petroleum products. For Q2 2021, the company’s net income attributable to Marathon shareholders skyrocketed to $8.5 billion from $9 million in the same quarter a year earlier as revenue rose 142.5% (YOY).
- APA Corp.: APA Corp. is an energy holding company whose major subsidiary is Apache Corp. APA is an oil and natural gas exploration and production company with global operations including in the U.S., Egypt, and the U.K. For Q2 2021, APA reported net income of $316 million versus net loss one year prior on revenue that more than doubled YOY. APA attributed the results to strong well performance in the U.S. business and a favorable pricing environment.
- Antero Midstream Corp.: Antero Midstream owns, develops, and operates midstream energy assets. The company provides gathering pipeline safety, and related services across North America.
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|ONEOK Inc. (OKE)||50.43||22.5||140.6||104.1|
|Valero Energy Corp. (VLO)||60.20||24.6||-87.3||166.9|
- ConocoPhillips: ConocoPhillips is primarily an oil and natural gas exploration and production company with operations across 15 countries. It produces crude oil, bitumen, natural gas, natural gas liquids and liquefied natural gas.
- ONEOK Inc.: ONEOK is a diversified energy company with operations across the U.S. It is a midstream energy company focused on natural gas. ONEOK reported net income which more than doubled YOY on rising revenues for Q2 2021, driven in part by strong performance in the company’s Rocky Mountain region operations.
- Valero Energy Corp.: Valero Energy is a petroleum refining and marketing company that produces gasolines, distillates, jet fuel, petrochemicals, lubricants, and similar products. The company has operations in the U.S., Canada, and Aruba. Valero reported a sharp YOY decline in net income in Q2 2021, though revenue tripled. The earnings performance is heavily impacted by a $1.8 billion inventory valuation adjustment benefit for Q2 2020.
These are the energy stocks that had the highest total return over the last 12 months.
|Energy Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Devon Energy Corp. (DVN)||25.70||17.4||150.9|
|Texas Pacific Land Corp. (TPL)||1,332.64||10.3||142.6|
|Targa Resources Corp. (TRGP)||41.85||9.6||128.9|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||33.1|
- Devon Energy Corp.: Devon Energy is an energy company involved in oil and gas exploration, development, and production. The company also transports oil, gas, and related products and processes natural gas. It has midstream and marketing operations primarily in North America. On Aug. 3, Devon Energy announced a fixed-plus-variable dividend of $0.49 per share based on the company’s Q2 2021 financial performance. The total dividend payout is 44% higher than Q1. Both the fixed quarterly dividend of $0.11 per share and the variable dividend of $0.38 per share are payable on Sep. 30 to shareholders of record as of Sep. 13, 2021.
- Texas Pacific Land Corp.: Texas Pacific Land Corp. is a land trust which owns roughly 900,000 acres in West Texas. The company is not an oil and gas firm, but it generates revenue from fees paid by energy companies to use the land and from royalties.
- Targa Resources Corp.: Targa Resources owns interests in a limited partnership that provides midstream natural gas services. The company gathers, treats, stores, and transports a variety of natural gas products. Net income attributable to shareholders declined by 14.5% YOY in Q2 2021, while revenue more than doubled. Revenue growth was driven by strong commodities sales.
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