In this piece, we will take a look at the ten best performing energy stocks right now. If you want to skip our coverage of the global energy industry and how the trends over the years are making the news now, then you can skip ahead to the 5 Best Performing Energy Stocks Right Now.
While the start of 2024 has seen artificial intelligence remain at the forefront of investor attention, the energy sector has also made several important headlines. Additionally, due to its close links with the economy, the global energy industry has also been quite regularly covered by the press and made money for investors over the past couple of years.
Starting from the outbreak of the coronavirus pandemic, virus induced global travel and hospitality restrictions meant that the demand for petroleum products would slip. Naturally, this didn't bode well for energy stocks, with big ticket names such as Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) dropped on the markets. Between January and November 2020, Exxon's shares dropped by 46% in the market, while Chevron's stock was down by 25.77%. For these sizeable entities, whose management and investors rely on their heft acting somewhat as an insurance policy against broader stock market downturns, the tail end of 2022 made it evident that even the biggest can fall under the right circumstances.
However, while energy stocks performed poorly in 2020, they would see some of their biggest fortunes a year later in 2022. This catalyst for energy stocks came in the form of the Russian invasion of Ukraine which saw global energy supply chains upended. Europe, banding together to prevent Russia from securing funds for its Ukraine war, decided to limit its imports of Russian fuel. This opened the 'taps' for energy companies such as Cheniere Energy, Inc. (NYSE:LNG) who were able to provide an alternative to the continent.
2022 was naturally a windfall for energy stocks. Continuing with our brief analysis of Exxon and Chevron's shares, while they were in the red in 2020, 2021's end saw them close at $61 and $117, respectively. Then, as the implications of the Russian invasion on global energy markets and supply chains became clear, the shares jumped by 80% and 53% in 2022 and ended up paying billions of dollars in dividends to their investors. These dividends became quite controversial back then, with U.S. government officials, including President Biden, criticizing the big oil companies for paying billions in dividends even though the money was being made from higher gas prices at the pump
In 2023, the energy stock climate was naturally cooler. No longer having the comfort of historically high prices, oil companies saw their revenues drop noticeably. At the same time, the turmoil in the global oil industry made it clear to those participating that there was a need to develop a non-Russian alternative supply chain. This remained the main theme for energy stocks in 2023, and it manifested itself through two of the biggest merger announcements in its history.
These deals aim to see Exxon Mobil Corporation (NYSE:XOM) buy the Irving, Texas based Pioneer Natural Resources Company (NYSE:PXD) for a massive $59.5 billion price tag, and Chevron Corporation (NYSE:CVX) acquire the New York City based oil exploration and production company Hess Corporation (NYSE:HES) for $53 billion are all that energy stock investors can talk about right now.
This is because February 2024 has seen controversy brew up on this front. Chevron surprised investors in February when it revealed that it might have to scrap its Hess Corp acquisition if its rival Exxon does not provide approval. As it turns out, Exxon holds the rights of refusal in an oil property in Guyana, which, if exercised, could mean that the billions of dollars that Chevron plans to spend to buy Hess can be wasted. As if this weren't enough, Exxon soon joined in and confirmed that it could not rule out Chevron's bid to acquire oil producing assets in Guyaya - which are among the most lucrative of their kind in the country. The rapidly development news cycle has also caught analysts and energy industry watchers by surprise, with some speculating that while the deal could still go through, Chevron might have been operating under the assumption that Exxon would give it the go ahead for the acquisition.
Looking at these details, it's clear that the oil industry, particularly in the U.S., is adapting with a changing environment following the 2022 oil boom. Therefore, we decided to take a look at some of the best performing energy stocks right now.
10 Best Performing Energy Stocks Right Now
An aerial view of the energy producing facility, highlighting its potential of providing utilities to the public.
Our Methodology
To make our list of the best performing energy stocks right now, we ranked all publicly traded energy companies by their one month share price performance and picked out the top 12 firms. Additionally, some firms tagged as financial services were also included since they operate primarily in the energy industry.
For these top energy stocks, we used we used hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Liberty Energy Inc. (NYSE:LBRT) is a key energy company when we look at the U.S. oil industry since it provides fracking and associated services to energy companies. It is one of the largest firms of its kind and one that has grown its fracturing fleet size to include dozens of vehicles over the past decade.
During Q4 2023, 34 out of the 933 hedge funds covered by Insider Monkey's research were the firm's shareholders. Liberty Energy Inc. (NYSE:LBRT)'s largest hedge fund stakeholder is Cliff Asness's AQR Capital Management as it holds a $13.6 million stake.
Archrock, Inc. (NYSE:AROC) is a backend energy company that provides compression equipment and related parts and services to companies in the natural gas industries. It's one of the strongest rated stocks on our list, with an average share price rating of Strong Buy and an average share price target of $20.25.
As of December 2023 end, 19 out of the 933 hedge funds part of Insider Monkey's database had invested in Archrock, Inc. (NYSE:AROC). Israel Englander's Millennium Management was the firm's biggest investor as it owned $17.3 million worth of shares.
CSI Compressco LP (NASDAQ:CCLP) is another natural gas equipment and services provider, one with a global footprint that stretches across several continents. A key player in the all important gas compression industry, the firm is currently in a bid to expand its portfolio by buying another compressing company.
Insider Monkey's fourth quarter of 2023 survey covering 933 hedge funds revealed that just three were CSI Compressco LP (NASDAQ:CCLP)'s investors.
7. North American Construction Group Ltd. (NYSE:NOA)
Number of Q4 2023 Hedge Fund Shareholders: 11
One Month Share Price Gain: 19.47%
North American Construction Group Ltd. (NYSE:NOA) provides heavy duty industrial equipment that enables oil companies to explore for the fuel. Its stable business also allows the stock to pay dividends, and on this front, North American Construction Group Ltd. (NYSE:NOA) announced a seven cent quarterly dividend in February 2024.
Insider Monkey scoured through 933 hedge fund portfolios for last year's December quarter and found that 11 had invested in the energy stock. Out of these, the largest North American Construction Group Ltd. (NYSE:NOA) shareholder was J. Carlo Cannell's Cannell Capital through its $$30 million investment.
Western Midstream Partners, LP (NYSE:WES) is a midstream oil and gas company headquartered in The Woodlands, Texas. It operates in the midstream sector of the energy supply chain that is responsible for transporting extracted fuels to the final consumer and making them suitable for end use along the way. If U.S. oil production were to rise, then midstream companies could end up playing a crucial role in the future depending on the amount of American oil that is domestically consumed. The firm has been struggling on the financial front as of late and has missed analyst EPS estimates in three of its four latest quarters. The shares are rated Buy on average, and the average share price target is $32.08.
Five out of the 933 hedge funds part of Insider Monkey's Q4 2023 research had bought Western Midstream Partners, LP (NYSE:WES)'s shares. Henry Breck's Heronetta Management was the biggest investor since it held $6.6 million worth of shares.
Disclosure. None. The author received no additional compensation for this piece over what is typically made by Insider Monkey. 10 Best Performing Energy Stocks Right Now was originally published on Insider Monkey.
