Top Energy Stocks for October 2021

The energy sector is composed of companies focused on the exploration, production, and marketing of oil, gas, and renewable resources around the world. Popular energy sector stocks include upstream companies that are primarily engaged in the exploration of oil or gas reserves. Well-known companies are Devon Energy Corp. (DVN) and Chesapeake Energy Corp. (CHK). Downstream companies include HollyFrontier Corp. (HFC), which refines and processes oil and gas products for delivery to consumers.

The benchmark Energy Select Sector SPDR ETF (XLE), an exchange-traded fund (ETF), has outperformed the broader market in the last year. XLE has provided a total return of 49.6% over the past 12 months, above the Russell 1000’s total return of 34.3%. These market performance numbers and all statistics in the tables below are as of Sept. 20, 2021.

Here are the top three energy stocks with the best value, fastest growth, and most momentum.

These are the energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. 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 ($)Market Cap ($B)12-Month Trailing P/E Ratio
Marathon Petroleum Corp. (MPC)57.1336.54.9
APA Corp. (APA)18.917.110.6
Antero Midstream Corp. (AM)9.954.813.8

Source: YCharts

  • Marathon Petroleum Corp.: Marathon is a crude oil refining company. Serving customers across the United States, the company refines, supplies, transports, and sells petroleum products.
  • APA Corp.: APA Corp. is an energy holding company whose major subsidiary is Apache Corp. APA is an oil and natural gas exploration and production company with global operations, including in the United States, Egypt, and the United Kingdom. The company announced on Sept. 20 that it would pay a regular cash dividend of 6.25 cents per common share. This marks a 150% increase from the previous dividend rate. The dividend is payable Nov. 22 to shareholders of record as of Oct. 22, 2021.
  • Antero Midstream Corp.: Antero Midstream owns, develops, and operates midstream energy assets. The company provides gathering pipeline safety and related services across North America.

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 YOY percentage revenue growth and their 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 law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with 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 (%)
ConocoPhillips (COP)57.0776.4545.8247.6
ONEOK Inc. (OKE)52.9923.6140.6104.1
Valero Energy Corp. (VLO)62.9725.7-87.3166.9

Source: YCharts

  • ConocoPhillips: ConocoPhillips is primarily an oil and natural gas exploration and production company with operations across 15 countries. It produces crude oil, bitumen, natural gas, natural gas liquids, and liquefied natural gas. On Sept. 20, ConocoPhillips announced that it would acquire for $9.5 billion in cash a Permian Basin position including roughly 225,000 net acres and more than 600 miles of crude, gas and water pipelines and infrastructure.
  • ONEOK Inc.: ONEOK is a diversified energy company with operations across the United States. It is a midstream energy company focused on natural gas. The company’s net income more than doubled YOY as natural gas production volumes rose sharply in Q2 2021, ended June 30. The growth was driven in part by outsized performance in ONEOK’s operations in the Rocky Mountain region.
  • Valero Energy Corp.: Valero Energy is a petroleum refining and marketing company that produces gasolines, distillates, jet fuel, petrochemicals, lubricants, and similar products. The company has operations in the United States, Canada, and Aruba.

These are the energy stocks that had the highest total return over the last 12 months.

Energy Stocks with the Most Momentum
Price ($)Market Cap ($B)12-Month Trailing Total Return (%)
Cimarex Energy Co. (XEC)77.418.0202.9
Devon Energy Corp. (DVN)28.1819.1202.2
Targa Resources Corp. (TRGP)44.1210.1191.6
Russell 1000N/AN/A34.3
Energy Select Sector SPDR ETF (XLE)N/AN/A49.6

Source: YCharts

  • Cimarex Energy Co.: Cimarex Energy is an oil and gas exploration and production company. The company has principle operations in the Permian Basin and the mid-continent areas of the U.S. Cimarex reported net income of $113.4 million for Q2 2021, ended June 30, compared with a net loss for Q2 2020. Revenue climbed by 185.7% YOY on strong oil sales. Net income would have been even higher for the quarter if the company had not posted a mark-to-market loss on commodity derivative positions of more than $125 million.
  • Devon Energy Corp.: Devon Energy is an energy company involved in oil and gas exploration, development, and production. The company also transports oil, gas, and related products and processes natural gas. It has midstream and marketing operations primarily in North America.
  • Targa Resources Corp.: Targa Resources owns interests in a limited partnership that provides midstream natural gas services. The company gathers, treats, stores, and transports a variety of natural gas products.

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