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Best Natural Gas Stocks for 2023 The Motley Fool

best natural gas stocks

Diving in, the company reported earnings of $1.14 per share, along with revenue of $2.3 billion. Additionally, revenue increased by 2.5% versus https://bigbostrade.com/ the same period, the previous year. Meanwhile, during Wednesday’s pre-market trading session, EQT Corp stock is trading at $33.47 a share.

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Where Russia loses, the U.S. wins and this Cold War adage is also true for the liquefied natural gas (LNG) market. The European search for substitutes has led to America’s shores, with data from Kpler showing that as of November 2022, U.S. LNG exporters had boosted their shipments to Europe by a whopping 137% as they ended up supplying more than half of Europe’s imported LNG. Natural gas, too, is something that can be utilized further so that it can complete with the renewable energy sector.

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The rising prices of natural gas in Europe have impacted the prices of everyday items. Countries in Europe are looking to secure LNG cargoes before the winter begins to restore some balance to supply and demand. The main disadvantage of natural gas is that it must travel through pipelines, which can pose a range of logistical and environmental challenges, particularly across oceans. Companies are turning natural gas into a pressurized liquid (liquefied natural gas) to be transported with specialized ships.

best natural gas stocks

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Earthstone Energy (NYSE:ESTE)

However, sustainability questions will cloud this dividend, as the payout ratio of 86% is on the high side. Natural gas contains a range of different chemical compounds but is primarily composed of methane. Methane is a colorless, odorless and tasteless gas that can be burned to create electrical power. Using natural gas as an energy source dates back to the early 1800s, when gas was used to illuminate street lamps. The once swampy earth and its decomposed plants and animals produced layers and layers of carbon-based materials.

Exxon Mobil is not only one of the largest oil and gas companies out there, it’s also one of the biggest companies, period. “The biggest risks of oil and gas stocks stem from potential recessionary risks as well as the potential for OPEC to increase production,” says Robert Johnson, finance professor at Creighton University. Although the energy transition away from fossil fuels such as coal, oil and natural gas is well underway, there is still a long way to go when it comes to the decarbonization of the global economy. Of course, any number of other factors could also cause the natural gas sector’s outlook to change. Cheniere has exhibited steady gains in revenues since the third quarter of 2020. In Q4 2022, the company’s revenues were up 39% year-over-year to $9.1 billion.

Natural Gas Stocks To Watch In April 2023

Kinder Morgan controls the country’s largest natural gas transmission network. With natural gas traveling through pipelines, the infrastructure in this sector is crucial. The company’s pipelines transport natural gas, crude oil, gas, and carbon dioxide. The terminals store renewable fuels, chemicals, and various other products. LNG exports on the rise, Kinder Morgan will continue to reap the benefits due to its network of pipelines and storage facilities.

  • Earthstone Energy Inc is an independent oil and natural gas development and production company.
  • The Street is also bullish on one of the best energy stocks to buy, with a 11 Buys and one Hold among analysts that have sounded off over the past three months.
  • Oil is also necessary to heat and cool our homes as well as to power factories.
  • At this moment, the January 2024 contract is quoted at $3.995 per metric million British thermal unit.
  • We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct.
  • The key is finding natural gas stocks that can benefit from the sector’s long-term growth potential while also being able to weather the inevitable storms of volatility.

Natural gas stock prices are highly correlated with market natural gas prices, which means that they may quickly change in value depending on trade conditions. Many natural gas stock prices fell sharply after the onset of the COVID-19 pandemic as natural gas demand fell. The natural gas stock has a market cap of $12 billion and an EPS of $4.30. Hess Corp., Civitas Resources Inc., and Permian Resources Inc. are among the top-performing natural gas stocks over the past year, all up by 30% despite falling natural gas prices.

Natural Gas Stocks To Buy [Or Avoid] Right Now

Neal Dingmann, Truist’s top-rated analyst, is bullish on the stock, with a Buy rating and a price target of $151. “ConocoPhillips’s growth for the foreseeable future is tied to unconventional, which comes primarily from the Permian, distantly followed by the Eagle Ford, and Montney,” Dingmann writes in a note. “The company also has attractive assets in Alaska, which could add additional growth. We rate the shares Buy given the dividend we believe sustainable and strong FCF yield.” EOG Resources (EOG, $114.63) is an American company engaged in the exploration, development, production and marketing of crude oil, natural gas and natural gas liquids (NGLs).

“OPEC and its partners moved on the weekend to accelerate production cuts to stem falling crude oil prices,” says Peter McNally, global sector lead for Industrials Materials and Energy at Third Bridge. “The reported 1 million barrel per day (bpd) curtailment is impactful and timed for maximum effect.” We studied the oil and gas industry in detail and sifted out the firms that have https://investmentsanalysis.info/ the largest market capitalization and rely primarily on natural gas or natural liquids for their products. Then, the net profit for all of these was calculated and they were ranked with this metric after which the top 12 companies were chosen. The dominance of America in the global natural gas supply chain also grew in 2022 in the aftermath of the Russian invasion of Ukraine.

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Out of 19 analysts following the company in June, five rated it a “strong buy” and six rated it a “buy.” Eight recommend holding the stock. Investors should understand the risks before buying natural gas stocks. Pipeline companies must build and operate the midstream infrastructure, such as pipelines, processing plants, and storage facilities, to transport gas from production basins to end markets. Meanwhile, natural gas needs to become a liquid for transportation overseas.

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Most Wall Street analysts are cautiously optimistic about the energy stock with a consensu rating of Moderate Buy based on six Buys and four Holds. Phillips 66 also intends to ramp up its adjusted EBITDA through its interest in DCP Midstream, which is engaged in the business of gathering, processing, https://forexhistory.info/ transporting, storing and marketing natural gas. In January, Phillips increased its economic interest in this venture to 86.8%. DCP Midstream is a master limited partnership between PSX and Enbridge. As such, investors would be wise to keep a close eye on energy stocks moving forward.

But its P/E ratio of 5.4 rates favorably below the industry median of 8.2. Where the company really attracts attention as one of the best natural gas stocks to buy, though, is its strong growth and profitability metrics. Today, the burning of methane gas is primarily used to create electrical energy, which is then distributed to homes, factories and commercial spaces. Companies that excavate, process or distribute natural gas may offer investors the opportunity to own a portion of the company by purchasing shares of stock. At the same time, you’re gaining exposure to the sector without buying in completely. Going one stock at a time and carving out a small niche in your portfolio is the best way to break into any new asset class.

The natural gas industry includes a wide range of companies involved in the exploration, production, processing, and distribution of natural gas. One secret to uncovering the best natural gas stocks is to focus on the lowest-cost producers. These companies should still be able to make money when prices decline. Another critical criterion is finding gas producers that have strong balance sheets, giving them the financial flexibility to withstand economic turbulence.

They predict it’ll rise from its most recent closing price of $37.66 on June 28 to $53 within the next year. Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all available deposit, investment, loan or credit products.

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