The energy sector is composed of companies focused on the exploration, production, and marketing of oil, gas, and renewable resources around the world. Energy sector stocks include upstream companies that primarily engage in the exploration of oil or gas reserves, such as Devon Energy Corp. Downstream companies include Marathon Petroleum Corp., which refines and processes oil and gas products for delivery to consumers. Among the industry’s biggest players are Chevron Corp. and ExxonMobil Corp.
Oil and gas prices have spiked in recent months due to Russia’s invasion of Ukraine. President Biden called on oil companies in June to refine more oil into gasoline in an effort to bring down gas prices nationwide.
Energy stocks, as represented by an exchange-traded fund (ETF)—the Energy Select Sector SPDR ETF (XLE)—have dramatically outperformed the broader market, posting a total return of 61.2% over the past six months compared to the Russell 1000 Index’s total return of -8.3%. These market performance numbers and all statistics in the tables below are as of July 19, 2022.
Below are the top three 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) ratios. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
|Best Value Energy Stocks|
|Price ($)||Market Capitalization (Market Cap) ($B)||12-Month Trailing P/E Ratio|
|APA Corp. (APA)||34.34||11.6||4.9|
|Marathon Petroleum Corp. (MPC)||87.85||47.5||5.2|
|Diamondback Energy Inc. (FANG)||116.54||20.7||7.7|
- APA Corp.: APA is an oil and gas exploration and production company. It has operations in the U.S., Egypt’s Western Desert, and the U.K.’s North Sea. It also has exploration opportunities offshore of Suriname. On June 21, the company announced that flow test data suggests oil-in-place resource of roughly 180 million barrels of oil at the Krabdagu exploration well offshore Suriname. APA holds a 50% working interest in the site.
- Marathon Petroleum Corp.: Marathon Petroleum is a crude oil refining company. Serving customers across the U.S., the company refines, supplies, transports, and sells petroleum products. Marathon Petroleum reported Q1 2022 earnings results on May 3. Net income grew by more than 18-fold as total revenues and other income soared year-over-year (YOY). Strong improvement in the company’s Refining & Marketing segment was a key factor in overall performance.
- Diamondback Energy Inc.: Diamondback Energy is an onshore operating oil and natural gas company. That targets locations within the Permian Basin, both developed and undeveloped reserves to explore and acquire.
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 year-over-year (YOY) percentage revenue growth and 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 laws or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with a quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest-Growing Energy Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Marathon Oil Corp. (MRO)||22.52||15.9||1.380||49.6|
|Coterra Energy Inc. (CTRA)||28.14||22.7||138.7||265.0|
- Marathon Oil Corp.: Marathon Oil is an independent energy company focused on the exploration and production of oil and gas. The company’s operations are located in four of the major resource plays in the U.S.—Eagle Ford, Bakken, the STACK/SCOOP, and the Permian—as well as operations in Equatorial Guinea.
- Coterra Energy Inc.: Coterra Energy is an independent oil and gas exploration and production company with operations focused on the Permian Basin, the Marcellus Shale, and the Anadarko Basin.
- ConocoPhillips: ConocoPhillips is an independent energy company engaged in the exploration and production of oil and natural gas. The company explores for, produces, and transports crude oil, natural gas, natural gas liquids (NGLs), liquefied natural gas, and bitumen. ConocoPhillips announced Q1 2022 earnings on May 5. Net income grew by nearly six-fold as revenue surged YOY. Higher prices and volumes and a tax benefit pertaining to an audit closure were all factors in earnings performance.
These are the energy stocks that had the highest total return over the past 12 months.
|Energy Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Antero Resources Corp. (AR)||34.88||10.9||178.1|
|Occidental Petroleum Corp. (OXY)||62.82||58.9||154.4|
|Devon Energy Corp. (DVN)||57.21||37.8||146.3|
|Energy Select Sector SPDR ETF (XLE)||N/A||N/A||61.2|
- Antero Resources Corp.: Antero Resources is an oil and natural gas company focused on further exploring properties in the Appalachian Basin. In 2018 Antero resources became the largest American producer of NGLs. The companies operating area mainly consists of the Utica Shale and the Marcellus Shale.
- Occidental Petroleum Corp.: Occidental Petroleum is an oil and gas exploration and production company. The company explores for and produces oil, NGLs, and natural gas. It also transports and stores oil and natural gas and manufactures basic chemicals and vinyls.
- Devon Energy Corp.: Devon Energy is an independent oil and natural gas exploration and production company. Its operations are focused on five core areas: the Delaware Basin, Eagle Ford, the Anadarko Basin, the Powder River Basin, and the Williston Basin. Devon Energy announced on June 8 that it would acquire the leasehold interest as well as related assets of RimRock Oil and Gas, LP. RimRock’s operations are in the Williston Basin. The acquisition is expected to close in Q3 2022 and is valued at $865 million.
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.