12 Most Profitable Energy Stocks
In this piece, we will take a look at the 12 most profitable energy stocks. If you want to skip our overview of the energy industry and the latest news, then you can take a look at 5 Most Profitable Energy Stocks.
The energy industry is once again at the center of global attention as 2023 comes to a close. This is because of the COP28 climate conference in Dubai, where governments from nearly every country on the planet agreed to a climate deal after two weeks of intense negotiations. The past two years have been full of dynamism for oil industry participants and investors, as the oil climate surged to feverish pitches in 2022, nearly two years after global demand snapped in the wake of the coronavirus outbreak.
Year to date, the S&P 500 Energy index is down by 7.31% due to lax demand in a tight industrial environment influenced by high interest rates and persistent inflation. The fall is unsurprising when we take a look at the revenue trends for some of the biggest energy companies in the world, such as Exxon Mobil Corporation (NYSE:XOM), Saudi Arabian Oil Company (TADAWUL:2222.SR), and Shell plc (NYSE:SHEL). For instance, Exxon's trailing twelve month revenue currently sits at $346 billion to mark a substantial drop over 2022's figures of $398.6 billion. Similarly, the Saudi Arabian Oil Company, Aramco, has witnessed a 200 billion Saudi Riyal revenue drop between its 2022 revenue and the TTM figures for September 2023. However, even as the oil companies' revenues stagger now, over the past three or four years, they have demonstrated remarkable growth.
Sticking with Aramco, Saudi Arabia's state-owned oil company brought in SAR1.2 trillion in revenue during 2019, so even though its TTM figures of SAR2 trillion are lower than 2022 sales, they have nearly doubled since the last normal year before COVID-19's full impact on global energy markets. In a similar vein, Exxon raked in $264 billion in 2019, to lead its September 2023 TTM revenue to mark a respectable 31% growth.
Therefore, it's clear that even as global delegates wrack their brains to figure out how to save the planet from carbon emissions, big oil is ticking along to ensure that economies can continue to grow. At the same time, global oil prices are weaker, as investors fine tune their 2024 demand prospects keeping the high rates limiting growth right now in mind. In its latest Monthly Oil Market Report (MOMR), the Organization of Petroleum Exporting Countries (OPEC) commented on the price trends for oil in November. The organization measures global crude oil prices through its OPEC Reference Basket, or the ORB.
In November, ORB dropped by 7.5% month over month to close at $84.92 per barrel. According to OPEC, at the heart of this rather high price drop was widespread speculation in the market driven by the strategies that hedge funds and other financial trading institutions typically engage in to make a return. It shared that the funds and money managers turned bearish about the market in November and started to offload their bullish positions.
In its report, the OPEC shares:
Crude oil futures prices experienced a significant downturn, marked by heavy selloffs amidst a highly volatile futures market. Speculators played a major role in this trend, cutting their bullish positions sharply while increasing short positions. The market dynamic was fuelled by exaggerated concerns about oil demand growth, which negatively impacted market sentiment. The ICE Brent front-month averaged $6.67, or 7.5%, m-o-m lower in November to stand at $82.03/b, and the NYMEX WTI fell by $8.09, or 9.5%, m-o-m to average $77.38/b. DME Oman crude oil futures prices decreased in November by $6.25, or 7.0%, m-o-m to settle at $83.06/b. Hedge funds and other money managers turned more bearish about crude oil, closing a large volume of bullish futures and options positions, specifically in the NYMEX WTI market. At the same time, they raised bearish positions for nine consecutive weeks to the week of 28 November. This has fuelled volatility and accelerated the decline in oil futures prices. Between late October and the week of 28 November, hedge funds and other money managers sold an equivalent of 89 mb, after liquidating an equivalent of 204 mb in the previous month.
Considering the recent trends in the oil industry and the return to normal after 2022's high revenues, we decided to see which energy companies remain the most profitable. While the energy sector is typically dominated by oil companies due to the fuel's near ubiquity in the global economy, as a whole it also made of other firms belonging to sectors such as power generation and clean energy.
A rig pumping oil in the midst of a sun-baked desert.
Our Methodology
To make our list of the most profitable energy stocks, we ranked the 25 biggest energy and utility companies that trade on the NYSE and the NASDAQ stock exchanges by their market capitalization and picked out those with the highest trailing twelve month net income as the most profitable energy stocks.
Most Profitable Energy Stocks
12. NextEra Energy, Inc. (NYSE:NEE)
Latest TTM Net Income: $7.6 billion
NextEra Energy, Inc. (NYSE:NEE) is an American utility headquartered in Juno Beach, Florida. The firm generates tens of thousands of megawatts of electricity for its customers in Florida. The shares are rated Buy on average and NextEra Energy, Inc. (NYSE:NEE) has beaten analyst EPS estimates in all four of its latest quarters.
By the end of this year's third quarter, 58 out of the 910 hedge funds covered by Insider Monkey had bought and owned NextEra Energy, Inc. (NYSE:NEE)'s shares. The firm's largest investor in our database is Ken Fisher's Fisher Asset Management as it owns 9.7 million shares that are worth $560 million.
11. National Grid plc (NYSE:NGG)
Latest TTM Net Income: $7.7 billion
National Grid plc (NYSE:NGG) is a British electricity and gas provider headquartered in London, the United Kingdom. 2023 is one of the more important years in the firm's recent past, as after a historic shakeup of the British energy supply chain last year, National Grid plc (NYSE:NGG) announced in November 2023 that it plans to spend a whopping $52 billion to beef up its grid in the U.K. and U.S.
Insider Monkey took a look at 910 hedge funds for their shareholdings during this year's September quarter and discovered that ten had held a stake in the company. D. E. Shaw's D E Shaw is National Grid plc (NYSE:NGG)'s biggest hedge fund shareholder as it holds a $5 million stake in the company.
10. EOG Resources, Inc. (NYSE:EOG)
Latest TTM Net Income: $8.7 billion
EOG Resources, Inc. (NYSE:EOG) is an American oil and gas exploration and production firm headquartered in Houston, Texas. December is shaping up to be a crucial month for the company, as it announces a slew of important appointments which includes a new president and a new chief operating officer.
During Q3 2023, out of the 45 hedge funds surveyed by Insider Monkey, 45 were EOG Resources, Inc. (NYSE:EOG) 's shareholders. Out of these, the firm's largest stakeholder is Natixis Global Asset Management's Harris Associates due to its $1 billion investment.
9. ConocoPhillips (NYSE:COP)
Latest TTM Net Income: $11.1 billion
ConocoPhillips (NYSE:COP) is a midsized diversified American oil and gas company with a presence in several areas of the oil and gas supply chain. 2023 has unsurprisingly been a mixed year for the firm on the financial front since it has missed analyst EPS estimates in two out of its four latest quarters. However, the shares are rated Strong Buy on average.
For 2023's September quarter, 62 out of the 910 hedge funds polled by Insider Monkey had held a stake in the company. ConocoPhillips (NYSE:COP)'s biggest hedge fund investor is Natixis Global Asset Management's Harris Associates since it owns $1.6 billion worth of shares.
8. Marathon Petroleum Corporation (NYSE:MPC)
Latest TTM Net Income: $11.5 billion
Marathon Petroleum Corporation (NYSE:MPC) refines, markets, and transports oil and associated fuels. December turned out to be quite a dangerous month for the company as a fire broke out at its refinery in Texas that is capable of processing more than half a million barrels of oil per day.
During this year's third quarter, 48 out of the 910 hedge funds covered by Insider Monkey's survey had invested in Marathon Petroleum Corporation (NYSE:MPC). Paul Singer's Elliott Management was the firm's largest shareholder since it owns 11 million shares that are worth $1.6 billion.
7. Equinor ASA (NYSE:EQNR)
Latest TTM Net Income: $17.1 billion
Equinor ASA (NYSE:EQNR) is the state-owned oil company of Norway. Not only is it one of the most profitable oil companies in the world, but it is also one of the biggest of its kind in Europe apart from oil mega titans such as Shell and BP. Equinor ASA (NYSE:EQNR)'s shares are rated Strong Buy on average and analysts have set an average share price target of $36.10.
After scouring through 910 hedge fund holdings for their investments during 2023's September quarter, Insider Monkey discovered that 14 had invested in the Nordic European oil giant. Equinor ASA (NYSE:EQNR)'s biggest investor in our database is Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital since it holds $298 million worth of shares.
6. TotalEnergies SE (NYSE:TTE)
Latest TTM Net Income: $19.5 billion
TotalEnergies SE (NYSE:TTE) is a well known French multinational oil company with a presence from the oil field to the pump. The firm successfully grew its presence in the renewable energy industry in December 2023 after a consortium that it is a part of won a contract for a 1,500 megawatt hydroelectric project.
As of Q3 2023, 21 out of the 910 hedge funds tracked by Insider Monkey had bought and owned TotalEnergies SE (NYSE:TTE)'s shares. Out of these, the largest shareholder was Ken Fisher's Fisher Asset Management courtesy of its $1.3 billion stake.
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Disclosure: None. 12 Most Profitable Energy Stocks is originally published on Insider Monkey.
