Energy stocks are excellent investments as the economy recovers.
This is because energy stocks thrive during economic expansion.
The energy sector is the “engine” that drives the global economy.
As countries expand their economies and shift usage to carbon-free sources of energy, the rising prices of oil and natural gas make this a fantastic moment to take a closer look at energy stocks.
This article lists some of the best energy stocks in the market today.
If you want to invest as an expat or high-net-worth individual, which is what i specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
Nothing written here is financial advice.
We don’t advise holding individual stocks. ETFs and funds are a better option.
This article merely looks at some of the better options.
What are Energy Stocks
Energy stocks include companies involved in the mining, processing, and distribution of fossil fuels, nuclear materials, and alternative energy sources.
Stocks in resource and commodities companies should not make up more than a third of a conservative investor’s portfolio, and no more than half of an aggressive investor’s portfolio.
And within that group, energy stocks might account for as much as half of the total. The remaining may include stocks in related industries like mining and fertilizer.
Due to the recent underperformance of oil and gas companies, several traders are considering exiting the market entirely.
Nonetheless, the energy market can protect your investments against inflation.
The low inflation rates over the last few decades are to blame for the industry’s poor performance. However, if the global economy improves in the years to come, energy equities are expected to rise again.
Why Invest in Energy Stocks
The energy sector is massive and absolutely essential to the world economy. Energy is a key part of the economy, generating trillions of dollars annually.
The global economy’s dependence on electricity guarantees perpetual and ever-increasing demand from the energy industry.
There is a chance for significant dividends or expansion of the business.
Companies that deal with energy can gain from price increases since their revenues per unit of output increase, such as oil production.
This presents an opportunity to either increase dividends paid to shareholders or to make long-term investments.
Global demand in the energy sector is on the rise.
The need for energy in countries like China and India will increase as their economies grow.
This bodes well for the future supply and demand of both conventional energy sources like oil and gas and emerging, more sustainable options.
The energy sector is rich with opportunities for financial gain. In terms of market capitalization, oil and natural gas companies dominate the energy sector.
You may diversify your portfolio and gain exposure to green equities like solar and wind energy producers by investing extensively in the energy sector.
It also has the potential to recover after an economic recession. Because of decreased travel and general demand, the energy sector struggled throughout the duration of the COVID-19 pandemic.
There may be a fresh influx of tourists now that the globe is slowly opening again, driving up demand and prices for the most promising energy equities.
What are the Best Energy Stocks
Brookfield Infrastructure Partners L.P. (NYSE:BIP)
Brookfield Infrastructure Partners L.P. (NYSE:BIP) is a firm specializing in the management of infrastructure assets, with its headquarters located in Ontario, Canada.
The corporation exhibits a significant degree of diversification in its portfolio, which is geographically dispersed throughout several regions globally.
Nevertheless, a significant proportion of the company’s assets are engaged in the energy industry.
In the month of April in the year 2023, Brookfield Infrastructure Partners L.P. (NYSE:BIP) entered into an agreement to purchase Triton International Limited (NYSE:TRTN), a company engaged in the leasing of intermodal freight containers, for a total consideration of $13.3 billion.
This transaction involves a combination of cash and shares. The purchase was successfully finalized on September 28, 2023, subsequent to the parties obtaining the requisite regulatory authorizations.
According to analysts, Brookfield Infrastructure Partners L.P. (NYSE:BIP) is considered an energy stock that is cheap and possesses a highly appealing valuation.
As of October 23rd, the company’s trailing twelve-month price-to-earnings ratio stands at 3.11.
Sunrun Inc. (NASDAQ:RUN), Plug Power Inc. (NASDAQ:PLUG), Bloom Energy Corporation (NYSE:BE), and Brookfield Infrastructure Partners L.P. (NYSE:BIP) are considered to be among the most promising energy stocks that are currently cheap.
Cameco Corporation (NYSE:CCJ)
Cameco Corporation (NYSE:CCJ) is notable for its inclusion in our compilation of the top-performing energy stocks in 2023 due to its status as a Canadian-based uranium firm.
Additionally, this particular stock ranks among the highest-rated stocks on the list, as indicated by its Strong Buy rating and the average share price target of $45.97 given by analysts.
At the conclusion of the second quarter of the current year, it was observed that 54 hedge funds out of the total of 910 had established an investment relationship with the firm.
Cameco Corporation (NYSE:CCJ) possesses a significant interest of $130 million held by Driehaus Capital, the foremost hedge fund stakeholder associated with Richard Driehaus.
Cameco Corporation (NYSE:CCJ) is among the leading energy stocks of 2023, with S.A.B. de C.V. (NYSE:VIST), Vista Energy, NGL Energy Partners LP (NYSE:NGL), and Geospace Technologies Corporation (NASDAQ:GEOS).
Array Technologies, Inc. (NASDAQ:ARRY)
Array Technologies, Inc. (NASDAQ:ARRY) is a solar equipment company headquartered in New Mexico.
The company specializes in the design, manufacturing, and sale of solar tracking solutions to a diverse customer base in the United States and across the globe.
Array Technologies, Inc. (NASDAQ:ARRY), a company recognized for its undervalued status in the energy sector, is commended for its reliance on domestic content sourcing, distinguishing it from other companies in the industry.
Array Technologies, Inc. (NASDAQ:ARRY) has disclosed its intention to uphold its dedication to utilizing materials sourced from the United States for its projects.
To this end, the business has formally established a durable alliance with Steel Dynamics, Inc. (NASDAQ:STLD) for the provision of coil, as revealed on September 12th.
Array Technologies, Inc. (NASDAQ: ARRY) recently disclosed its plans to undertake an expansion initiative in Albuquerque, New Mexico.
This expansion will involve the establishment of a manufacturing facility on the west side, with an estimated cost of $49 million and a total area of 216,000 square feet.
Newpark Resources, Inc. (NYSE:NR)
Newpark Resources, Inc. (NYSE:NR) is an American oil firm specializing in backend operations, offering a range of services including drilling, building, and several other support functions to oil corporations.
The ownership of the firm’s shares is predominantly held by insiders and institutional investors, accounting for over 85% of the total.
Furthermore, the stock has experienced a significant increase of 72% in value since the beginning of the year.
As of the conclusion of the second quarter of 2023, a total of 15 hedge funds out of the 910 were found to have possessed an ownership interest in Newpark Resources, Inc. (NYSE: NR).
Among the aforementioned stakeholders, the primary shareholder of the firm is Adage Capital Management, led by Phill Gross and Robert Atchinson.
Adage Capital Management possesses a significant ownership stake of 5.4 million shares, with an estimated value of $28.6 million.
Enphase Energy, Inc. (NASDAQ:ENPH)
Enphase Energy, Inc. (NASDAQ:ENPH) is a company headquartered in California that specializes in the manufacturing, production, and sale of microinverters from its M, S, and IQ series.
Additionally, the firm offers Envoy monitoring systems and various inverter accessories to its clientele within the solar photovoltaic industry.
Enphase Energy, Inc. (NASDAQ:ENPH) expanded its presence in the European solar power market by venturing into Greece on October 23.
This move was facilitated through the introduction of its Q8 Microinverters and IQ batteries.
The integration of solar and battery systems plays a crucial role in the strategic vision of Greece’s Ministry of Environment and Energy, as it seeks to facilitate a shift towards solar power alternatives while reducing reliance on conventional fossil fuel sources.
Therefore, the government has implemented a subsidy program for solar power technology with the objective of constructing a total of two gigawatts of residential solar capacity by the year 2030.
During the second quarter, a total of 50 hedge funds were found to have invested in Enphase Energy, Inc. (NASDAQ:ENPH), collectively holding a stake valued at $772.727 million.
According to analysts, this particular energy stock is considered to be very undervalued and a favourable investment option.
Their predictions indicate a potential increase of 67.57% in the company’s stock price, based on the market close data from October 23.
TechnipFMC plc (NYSE:FTI)
TechnipFMC plc (NYSE:FTI) is a British corporation that provides assistance to oil corporations in the development and operation of their onshore and offshore drilling platforms as well as production facilities.
On average, analysts have assigned a Buy rating to the shares of the firm, with an average share price target of $23.75, indicating a potential upside of $3.
Insider Monkey conducted an analysis of 910 hedge funds’ investments during the second quarter of 2023, revealing that 33 of these funds were found to have ownership stakes in the firm.
The largest hedge fund investor in TechnipFMC plc (NYSE:FTI) is Two Sigma Advisors, managed by John Overdeck and David Siegel, with a significant investment of $89.7 million.
Frontline Plc (NYSE:FRO)
Frontline Plc, a publicly-traded company listed on the New York Stock Exchange under the ticker symbol FRO, operates as a prominent entity in the domain of maritime oil transportation.
The company boasts a fleet comprising 70 tankers, thereby consolidating its position in the industry.
Despite experiencing lower-than-expected analyst EPS forecasts in three out of its four most recent quarters, the company is currently in the process of growing its vessel fleet and has set its sights on acquiring twenty-four ships from a European corporation.
In the June quarter of the current year, a survey conducted by Insider Monkey revealed that 23 out of the total 910 hedge funds included in the study had made investments in Frontline plc (NYSE:FRO).
ReNew Energy Global Plc (NASDAQ:RNW)
ReNew Energy Global Plc (NASDAQ:RNW) is a firm operating in the renewable energy sector, specializing in the generation of power using wind and solar technologies.
The company is the leading renewable energy firm in India, with a substantial generating capacity of 13.4 gigawatts (GW). ReNew Energy Global Plc (NASDAQ: RNW) is recognized as India’s inaugural renewable energy enterprise to have a production capacity exceeding 1 GW.
In the second quarter, Rubric Capital Management emerged as the leading hedge fund investor in ReNew Energy Global Plc (NASDAQ:RNW), possessing a substantial portfolio of around 8.166 million shares valued at $44.749 million.
ReNew Energy Global Plc (NASDAQ:RNW) has garnered attention from two financial analysts on Wall Street, who have provided an average price target of $8.78 for the company.
Both analysts have a positive outlook on the company’s stock and maintain a Buy rating.
Gulfport Energy Corporation (NYSE:GPOR)
Gulfport Energy Corporation, listed on the New York Stock Exchange under the ticker symbol GPOR, is a prominent American corporation engaged in the exploration and production of oil and gas.
The company possesses an extensive portfolio of production holdings spanning over two hundred thousand acres.
On average, the shares of this company have been assigned a Strong Buy rating, while a significant number of analysts provided coverage throughout the months of August, September, and October, rating the stock as Buy.
At the conclusion of the second quarter of 2023, a total of 29 hedge funds out of the 910 had made purchases of the shares belonging to the aforementioned corporation.
According to our database, Edward A. Mule’s Silver Point Capital is identified as the primary shareholder of Gulfport Energy Corporation (NYSE:GPOR), with a significant ownership of shares valued at $753 million.
TransAlta Corporation (NYSE:TAC)
The TransAlta Corporation (NYSE:TAC) is an energy corporation based in Canada that engages in the operation of various renewable and conventional energy facilities, including hydro, wind, solar, natural gas, and battery energy storage.
The organization now manages a total of 60 establishments inside the Canadian territory, with a collective gross installed capacity of 5,718 megawatts (MW).
In the United States, the corporation possesses a total installed capacity of 1,219 MW over ten facilities. Similarly, in Australia, TransAlta Corporation (NYSE:TAC) operates six facilities that collectively generate 500 MW of power.
During the preceding quarter, a total of six analysts have provided coverage on the stock of TransAlta Corporation (NYSE:TAC).
Notably, all of these analysts have consistently upheld a Buy rating for the company’s stock. Furthermore, the average price target assigned by these analysts is $11.92.
According to the average analyst price target, there is a projected upside of 53.31% to the current stock price of $7.77, as of the market close on October 23rd.
According to analysts, TransAlta Corporation (NYSE:TAC) is ranked 11th on our list of energy companies that are considered undervalued.
During the second quarter (Q2), the stock of TransAlta Corporation (NYSE:TAC) was held by a total of 18 hedge funds, with a collective position value amounting to $98.767 million.
Weatherford International plc (NASDAQ:WFRD)
Weatherford International plc (NASDAQ:WFRD) is a substantial corporation that offers comprehensive well completion, drilling, and ancillary services to oil corporations.
In August 2023, Goldman Sachs expressed confidence in the future prospects of the firm, attributing this to Weatherford International’s broad global footprint.
This presence enables Weatherford International to take advantage of long-term trends related to the increase of capacity in the energy sector.
As of June 2023, a total of 33 hedge funds out of the 910 hedge funds monitored by Insider Monkey were found to have maintained an ownership interest in Weatherford International plc (NASDAQ:WFRD).
Yacktman Asset Management, under the ownership of Donald Yacktman, possesses the largest ownership interest valued at $253 million among the entities mentioned.
The AES Corporation (NYSE:AES)
The AES Corporation, listed on the New York Stock Exchange under the ticker symbol AES, is a utility and power-producing business headquartered in Virginia.
The company provides its services throughout several regions, namely Latin America, Africa, North America, Europe, the Middle East, and Asia, through a multitude of companies, such as AES Alamitos Energy, AES Alamitos, AES Ohio Generation, AES Integrated Energy, among others.
The AES Corporation (NYSE:AES) announced its quarterly dividend of $0.1659 per share on October 7th.
The disbursement of the dividend is scheduled for November 15, and it will be distributed to shareholders who are officially registered as of November 1.
As of October 23rd, the corporation exhibits a dividend yield of 4.74%.
The AES Corporation (NYSE:AES) announced on October 13 its involvement as a collaborator in two Regional Clean Hydrogen Hubs, which have been granted funding of up to $2.4 billion as a result of the passage of the Bipartisan Infrastructure Law (BIL) in 2021.
The company’s objective is to establish dominance in the green hydrogen sector in the United States.
This goal will be achieved by securing finance for green hydrogen initiatives facilitated by the establishment of two hubs.
The ARCHES Hub, an organization dedicated to advancing renewable clean hydrogen energy systems, has been allocated a substantial funding of $1.2 billion.
This hub is situated in the state of California. The HyVelocity Hub, situated along the Gulf Coast of Texas and Louisiana, is set to get substantial funding of up to $1.2 billion.
According to analysts, the AES Corporation (NYSE:AES) is considered to be among the top undervalued energy companies for potential investment, with Plug Power Inc. (NASDAQ:PLUG), Sunrun Inc. (NASDAQ:RUN), and Bloom Energy Corporation (NYSE:BE).
Final Thoughts
Private banking clients and investment funds alike are increasingly looking to the energy sector as a stable source of income in today’s economy.
Energy stocks, in particular the best defensive stocks and the ever-reliable top consumer staples stocks and consumer discretionary stocks, give an intriguing option for investors wishing to diversify despite the market’s continued volatility.
Energy stocks provide a buffer against inflation and help build long-term, secure portfolios. Given the current economic climate’s unpredictability, energy ETFs are an excellent addition to any investing portfolio thanks to their steady and income-generating nature.
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