The turbulent drive of the year 2020 has come to an end with the closing of the terrifying pandemic year. The year almost moved various sectors of the financial world to the trash and dilapidated state. The year 2021 has begun, and with this, the economy is recovering so is the financial market. This year will pave the way for investments and massive profits if you choose your trade wisely. If you are planning to invest in energy stocks, here are the top 10 energy stocks to invest in 2021. Check out the list.
What are energy stocks?
Energy stocks are stocks of those firms or companies that mainly focus on production, exploration and marketing of gas, renewable resources, and oil worldwide. Some of the famous energy stocks include downstream and upstream stocks.
Downstream firms are those which process and refine gas and oil items and then deliver them to customers. Whereas, upstream firms are those which mainly pay heed on the exploration of gas or oil reserves.
Top energy stocks to harvest profit
1) NextEra Energy:
This company is counted as one of the larger electric utility firms. The firm is also known as a leader in generating energy from the Sun and the wind. Its energy resources segment is responsible for providing clean energy to end-users and other firms across the world. The firm had also proved its flexibility and strength in 2020. The pandemic had minimal impacts on the production of the firm due to steady demand for electricity.
The firm claims that it has one of the best balance sheets in the sector of electricity. Moreover, it has a conventional dividend payout utility ratio which adds another feather to its robust financial profile.
2) Valvoline Inc:
Valvoline Inc is the largest distributor and manufacturer of automotive chemicals and lubricants. The firm produces grease items, motor oil, brake fluid, antifreeze and several other products. In early December 2020, the company announced that it is buying twenty-seven oil-change service stations from the renowned Car Wash Partners Inc. This leads to certain fluctuation prices of stocks.
1) Price: $ 23.33
2) 12-Month Trailing P/E Ratio: 13.7
3) Market Cap ($B): 4.3
3) Cheniere Energy Inc:
Cheniere Energy Inc is an energy firm which mainly focuses on LNG (Liquefied natural gas). It operates and undertakes LNG pipelines and terminals.
Notably, the firm recorded a net loss on November 6. The revenue of the firm declined to 32.7% in the third quarter of 2020. The firm also announced that it temporarily suspended its working at Sabine Pass (LNG terminal) because of Hurricane Laura during the quarter.
Cheniere Energy Inc:
1) Price: $ 59.05
2) 12-Month Trailing P/E Ratio: 15.9
3) Market Cap ($B): 14.9
4) Williams Companies Inc:
Williams Companies Inc is a popular energy stock which operates numerous natural gas pipelines across America (North). The firm reported a net income surge of 33.5% on November 2 despite a drop of 3.3% in the third quarter of 2020. The net income rate surged due to expense and lower cost compared to the third quarter of the previous year.
Williams Companies Inc:
1) Price: $ 21.75
2) EPS growth (%): 38.9
3) Market Cap ($B): 26.4
5) Atero Midstream Corp:
Antero Midstream controls to develop and operates midstream energy products. It works on gathering compressor stations and pipelines and manages a clearwater facility, water distribution, pipeline safety services and fractionation.
Atero Midstream Corp
1) Price: $ 7.96
2) 12-Month Trailing Total Return (%): 67.0
3) Market Cap ($B): 3.8
6) EQT Corp:
EQT is an energy firm which focuses entirely on natural gas position, transmission and gathering in the Appalachian area. The firm produces natural gas liquids, natural gas and crude oil. In the mid of October EQT announced that it had signed a contract with Chevron’s USA Inc to undertake Chevron’s midstream and upstream assets in the Appalachian Basin region for $735.
1) Price: $ 13.61
2) 12-Month Trailing Total Return (%): 40.7
3) Market Cap ($B): 3.8
7) Williams Cos
Williams Cos is a pipeline operator which provides a robust dividend with relatively stable energy investment. The firm stands at the top position in the list of S&P 500 top 10 dividend payers with more than 7% payout (current). Thus, this type of stability makes it the best energy stock to invest in the year 2021. It can lead to fruitful profit.
- Market value: $26.3 billion
- Analyst ratings: 6 Buy, 14 Strong Buy, 0 Sell, 4 Hold and 0 Strong Sell
- Dividend yield: 7.4%
8) Cimarex Energy
Cimarex Energy is a Denver-based energy stock, an independent gas and oil production and exploration firm with around 620 million barrels of reserves. It also has an ownership interest in approximately 28 production gas wells and oil.
Being an independent energy firm, it faced many difficulties in 2020. Cimarex’s management surged to the challenge with decisive and quick action, putting the firm in a strong position in 2021. Cimarex is one of the best energy stocks to invest in the year 2021.
- Market value: $3.7 billion
- Analyst ratings: 7 Buy, 16 Strong Buy, 0 Sell, 2 Hold and 0 Strong Sell
- Dividend yield: 2.4%
9) Diamondback Energy
The year 2020 hit the Diamondback energy hard like other energy firms, but it recovered soon. Diamondback’s stocks have always remained a risky investment, but we cannot ignore that the company has an excellent market cap of $6 billion. Hence, this makes it a more mature firm and good investment option than other small-cap firms in the arena of oil patch which has been hit hardest by the pandemic.
- Market value: $6.4 billion
- Analyst ratings: 8 Buy, 20 Strong Buy, 0 Sell, 5 Hold and 0 Strong Sell
- Dividend yield: 3.7%
The ConocoPhillips is one of the most extensive energy stocks of the United States with a more than $40 billion market value. The efficient company management, strong balance sheet and big brand to make out of the market. Thus, it makes it one of the best energy stocks to invest in 2021.
- Market value: $42.7 billion
- Analyst ratings: 7 Buy, 14 Strong Buy, 0 Sell, 2 Hold and 0 Strong Sell
- Dividend yield: 4.3%
The Bottom Line
The energy stocks are the backbone of the economy as it provides power and fuel needed to run business and travel. COVID-19 pandemic hit the economy hard and so the energy industry. It impacted the price of energy stocks to a larger extend. But the energy stocks can prove to be the best Investment in the year 2021.
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Frequently asked questions
What are energy stocks?
The energy stocks are stocks of those firms that mainly focus on production, exploration and marketing of gas, renewable resources, and oil worldwide.
List some top energy stocks.
Some of the top energy stocks are ConocoPhillips, Diamondback Energy, Cimarex Energy, Williams Cos and several others.