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 early 2020 oil price war and the COVID-19 pandemic drove oil prices to record lows in April 2020 and sharply pushed down energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE). XLE has risen from its bottom last year, and is now slightly outperforming the broader market. It has provided a total return of 43.4% over the past 12 months, just above the Russell 1000’s total return of 39.9%. These market performance numbers and all statistics in the tables below are as of June 17, 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 | |
| Equitrans Midstream Corp. ( ETRN) |
9.09 | 3.9 | 10.7 |
| Antero Midstream Corp. ( AM) |
10.09 | 4.8 | 13.8 |
| Valvoline Inc. ( VVV) |
33.02 | 6.0 | 18.1 |
Source: YCharts
- Equitrans Midstream Corp.: Equitrans Midstream owns and operates midstream assets in the Appalachian Basin. The company manages natural gas transmission, storage, and gathering systems and lines.
- Antero Midstream Corp.: Antero Midstream owns, develops, and operates midstream energy assets. The company provides gathering pipeline safety, and related services across North America.
- Valvoline Inc.: Valvoline is a manufacturer and distributor of automotive lubricants and chemicals. The company produces motor oil, antifreeze, brake fluid, grease products, and more. On May 18, the company announced that its board of directors had approved a share repurchase authorization of $300 million through Sep. 30, 2024. At the same time, Valvoline announced a realignment of its operating segments, effective Q3 FY 2021. Beginning in Q3, the company said it will have two operating segments: Retail Services, which renames the former Quick Lubes segment; and Global Products, which includes the former Core North America and International segments.
These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest Growing Energy Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Cabot Oil & Gas Corp. ( COG) |
15.91 | 6.4 | 138.5 | 19.0 |
| Valvoline Inc. (VVV) | 33.02 | 6.0 | 12.1 | 21.3 |
| Cheniere Energy Inc. ( LNG) |
86.40 | 21.9 | 7.7 | 14.1 |
Source: YCharts
- Cabot Oil & Gas Corp.: Cabot Oil & Gas is an oil and gas company that develops and explores properties in North America. The company maintains interests in Texas, Louisiana, the Rocky Mountains, and the Appalachian and Anadarko Basins, as well as in Canada. The company announced on May 24 that it would combine with Cimarex Energy Co. (XEC) in an all-stock merger of equals. The enterprise value of the combined company is approximately $17 billion. The transaction is expected to close in Q4 2021 and will result in a company operating under a new name.
- Valvoline Inc.: See above for company description.
- Cheniere Energy Inc.: Cheniere Energy owns and operates liquefied natural gas pipelines and terminals in Louisiana and Texas. In its Q1 2021 report, released in May, the company announced that it would increase full-year 2021 guidance for the second consecutive quarter. The increase was driven in part by strength in the global liquefied natural gas market.
These are the energy stocks that had the highest total return over the last 12 months.
| Energy Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Cimarex Energy Co. ( XEC) |
65.68 | 6.8 | 133.3 |
| Devon Energy Corp. (DVN) | 27.59 | 18.7 | 133.0 |
| Targa Resources Corp. ( TRGP) |
45.36 | 10.4 | 117.5 |
| Russell 1000 | N/A | N/A | 39.9 |
| Energy Select Sector SPDR ETF (XLE) | N/A | N/A | 43.4 |
Source: YCharts
- Cimarex Energy Co.: Cimarex is a crude oil and natural gas exploration and development company. It’s engaged in drilling, completing and operating wells in states including Oklahoma, Texas and New Mexico. As indicated above, Cimarex will combine with Cabot Oil & Gas in an all-stock merger.
- 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. In May, the board of directors declared a fixed-plus-variable dividend of $0.34 per common share. It represents a 13% increase in total payout relative to the prior dividend. The fixed quarterly dividend is $0.11 and the variable dividend is $0.23 per share. This dividend is payable on June 30 to shareholders of record as of June 14.
- Targa Resources Corp.: Targa Resources provides natural gas and natural gas liquids services. The company gathers, compresses, treats, process, and sells natural gas. It also stores, fractionates, treats, transports, and sells natural gas liquids and related products.
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