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15 Best Energy Stocks to Buy Now

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·18 min read
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In this article, we will be looking at the 15 best energy stocks to buy now. If you want to skip our detailed analysis of the energy industry, go directly to the 5 Best Energy Stocks to Buy Now.

In light of a recent falling out between OPEC nations and their allies this year, oil prices have risen to hit their highest record this July. Major oil-producing countries hit a snag in their OPEC+ meeting when the UAE and Saudi Arabia clashed on a proposed extension of eight months to output curbs. This disagreement over the idea to raise supply to meet rising global demand for oil has led to a rapid and unprecedented surge in oil prices, with Brent crude oil jumping 0.8% to $77.78 per barrel on July 6th, and UniCredit analysts commenting that the OPEC+ stalemate would result in Brent crude oil prices crossing the $80 a barrel mark, given that the rising demand can only be met by more oil supply.

Additionally, in a Reuters report published this June, OPEC's secretary-general commented that OPEC+ expected a further fall in oil inventories in the coming months, indicating that producers' efforts to support the market were paying off. The oil sector has been gravitating towards becoming a profitable investment opportunity, given that shares of companies with ties to the sector also rose in light of OPEC+ agreements to ease production cuts this June. This development implied a bullish outlook for global demand for oil. Rising oil prices can also seem like bad news for the average citizen, but good news for the average investor, as shareholders in oil companies can benefit from capital gains due to share price appreciation and increased dividend income in times of higher oil and gas prices. Finally, developments

such as the above mentioned recovering and steadily growing demand for oil, consumption increasing particularly in Asia, vaccine distribution restoring confidence in the sector, and OPEC+ retaining their control over oil supply are testifying to the oil sector's recovery and growth in the aftermath of the worst of the pandemic.

The energy sector as a whole is proving to be a worthwhile investment option in light of investor confidence that inflation will come alongside greater economic growth leading to more money being poured into the energy sector. This May, the energy sector was leading the S&P 500's 11 sectors with its 10% gain, according to the Wall Street Journal. Rising demand for energy sources, particularly oil and gas, was impacted by relaxed travel restrictions. Jennifer Foster, the co-chief investment officer for equities at Chilton Trust, has commented that increased traveling directly affects the demand for oil and gas, leading to a boom in the energy sector. It's not just the traditional energy sector that's gaining anymore either, as investors become climate-conscious and begin to pour money into clean energy. Just last year, about $520 billion was poured into renewables, for instance. These developments showcase that the energy industry, and the oil and renewables sectors within in, are becoming popular investment options, resulting in companies like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR) gaining.

Just like the energy markets, the hedge fund industry is also going through massive changes. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Best Energy Stocks to Buy Now
Best Energy Stocks to Buy Now

Photo by David Thielen on Unsplash

Without further ado, let's look at the 15 best energy stocks to buy now. The stocks added to our list below are a mix of traditional energy stocks and companies investing heavily in green energy and were selected on the basis of hedge fund sentiment, analysts' ratings, fundamentals, and growth potential based on core business strengths.

15 Best Energy Stocks to Buy Now

15. National Energy Services Reunited Corp. (NASDAQ: NESR)

Number of Hedge Fund Holders: 12

National Energy Services Reunited Corp. (NASDAQ: NESR) is a provider of oilfield services to oil and gas companies in the Middle East, North Africa, and the Asia Pacific. It ranks 15th on our list of the best energy stocks to buy now.

This June, National Energy Services Reunited Corp. (NASDAQ: NESR) brought in $150 million's worth of oil company contracts signed with major oil companies for Integrated Rigless Services and Drilling and Completion Fluids in the Middle East and North Africa. Barclays has raised its price target on National Energy Services Reunited Corp. (NASDAQ: NESR) from $17 to $22 this February as well, with an Overweight rating on the shares.

In the first quarter of 2021, National Energy Services Reunited Corp.'s (NASDAQ: NESR) revenue was $212.43 million, up 6.59% year over year and beating estimates by $7.26 million, and it has a gross profit margin of 18.63%. The stock has gained 29.31% in the past 6 months and 39.86% year to date.

As of the end of the first quarter of 2021, 12 hedge funds held stakes in National Energy Services Reunited Corp. (NASDAQ: NESR) worth roughly $58.5 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $44.3 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), National Energy Services Reunited Corp. (NASDAQ: NESR) is a good energy stock to invest in.

14. TotalEnergies SE (NYSE: TTE)

Number of Hedge Fund Holders: 17

TotalEnergies SE (NYSE: TTE) is an integrated oil and gas company operating globally. It has five segments: Exploration & Production, Integrated Gas, Renewables & Power, Refining & Chemicals, and Marketing & Services. It ranks 14th on our list of the best energy stocks to buy now.

This June, MKM Partners initiated its coverage of TotalEnergies SE (NYSE: TTE) with a Buy rating and a $70 price target. Analyst John Gerdes also cited the fact that more than 20% of the company's capital spending goes to the renewables and electricity sectors now.

In the first quarter of 2021, TotalEnergies SE (NYSE: TTE) had an EPS of $1.10, beating estimates by $0.24. The company's revenue was $38.63 billion, up 0.15% year over year and surpassing the previous quarter's $32.35 billion revenue. The company has a gross profit margin of 38.33%, and the stock has gained 17.83% in the past year.

As of the end of the first quarter of 2021, 17 hedge funds held stakes in TotalEnergies SE (NYSE: TTE) worth roughly $1.16 billion. This is compared to 14 hedge funds in the previous quarter with a total stake value of approximately $980 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), TotalEnergies SE (NYSE: TTE) is a good energy stock to invest in.

13. California Resources Corporation (NYSE: CRC)

Number of Hedge Fund Holders: 23

California Resources Corporation (NYSE: CRC) is an independent oil and natural gas exploration and production company operating in the State of California. The stock ranks 13th on our list of the best energy stocks to buy now.

This May, RBC Capital initiated coverage of California Resources Corporation (NYSE: CRC) with an Outperform rating and a $40 price target. The firm's analyst Scott Hanold commented that the company's assets would support its participation in the energy transition.

In the first quarter of 2021, California Resources Corporation (NYSE: CRC) had an EPS of -$1.13. The company's revenue was $261 million, up 6.53% year over year and surpassing the previous quarter's $228 million revenue. California Resources Corporation (NYSE: CRC) has a gross profit margin of 49.79% and has gained 15.42% in the past 6 months and 22.18% year to date.

As of the end of the first quarter of 2021, 23 hedge funds held stakes in California Resources Corporation (NYSE: CRC) worth roughly $602 million. This is compared to 20 hedge funds in the previous quarter with a total stake value of approximately $525 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), California Resources Corporation (NYSE: CRC) is a good energy stock to invest in.

12. PDC Energy, Inc. (NASDAQ: PDCE)

Number of Hedge Fund Holders: 24

PDC Energy, Inc. (NASDAQ: PDCE) is an independent exploration and production company that acquires, explores, develops, and produces crude oil, natural gas, and natural gas liquids in the US. It ranks 12th on our list of the best energy stocks to buy now.

This July, Truist raised its price target on PDC Energy, Inc. (NASDAQ: PDCE) from $55 to $69, while keeping its Buy rating on the shares. The month before, JP Morgan also raised its price target on the shared to $65 with an Overweight rating and analyst Arun Jayaram commenting that the company's three year plan could bring in about $2.5-3 billion of free cash flow.

In the first quarter of 2021, PDC Energy, Inc. (NASDAQ: PDCE) had an EPS of $1.41, beating estimates by $0.53. The company's revenue was $286.04 million, surpassing the previous quarter's $278.56 million revenue, and it has a gross profit margin of 80.57%. The stock has gained 79.05% in the past 6 months and 115.51% year to date as well.

As of the end of the first quarter of 2021, 24 hedge funds held stakes in PDC Energy, Inc. (NASDAQ: PDCE) worth roughly $292 million. This is compared to 21 hedge funds in the previous quarter with a total stake value of approximately $218 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), PDC Energy, Inc. (NASDAQ: PDCE) is a good energy stock to invest in.

11. First Solar, Inc. (NASDAQ: FSLR)

Number of Hedge Fund Holders: 24

First Solar, Inc. (NASDAQ: FSLR) is a renewable energy or solar power company. It provides photovoltaic solar energy solutions in the US, Japan, France, Canada, India, Australia, and internationally, and it ranks 11th on our list of the best energy stocks to buy now.

This July, First Solar, Inc. (NASDAQ: FSLR) has announced its $11 million investment in underserved communities in the US, while Goldman Sachs has raised its price target on the shares to $62. The month before, Citigroup raised its EBITDA estimate for First Solar, Inc. (NASDAQ: FSLR) to $625 million, in light of the company’s increased module production. The firm also reiterated its Buy rating alongside the $100 price target on the shares. Stephens also initiated coverage of First Solar, Inc. (NASDAQ: FSLR) with an Overweight rating in the same month.

In the first quarter of 2021, First Solar, Inc. (NASDAQ: FSLR) had an EPS of $0.81, missing estimates by -$0.03. The company's revenue was $803.37 million, up 50.97% year over year and beating estimates by $86.34 million. First Solar, Inc. (NASDAQ: FSLR) has a gross profit margin of 27.25% and it has gained 57.19% in the past year as well.

By the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in First Solar, Inc. (NASDAQ: FSLR). The total value of their stakes was roughly $304 million. This is compared to the previous quarter’s 34 hedge fund holders with a total stake value of approximately $406 million.

White Brook Capital, an investment management firm, mentioned First Solar, Inc. (NASDAQ: FSLR) in their first quarter 2021 investor letter. Here’s what they said:

“First Solar (FSLR) and Itron (ITRI), both of which I’ve written about in past In Focus sections were long-term positions that were sold as their prices exceeded price targets. Both are solid companies that remain on my watchlist, but the opportunity cost of not investing in other potential investments exceeded their potential mid-term returns.”

10. BP p.l.c. (NYSE: BP)

Number of Hedge Fund Holders: 29

BP p.l.c. (NYSE: BP) operates through its Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments. It ranks 10th on our list of the best energy stocks to buy now.

On June 23rd, BP p.l.c. (NYSE: BP) began production in the Gulf of Mexico, starting with its new Manuel project. Additionally, JP Morgan has an Overweight rating on the shares as of this July.

In the first quarter of 2021, BP p.l.c. (NYSE: BP) had an EPS of $0.78, beating estimates by $0.35, while its revenue was $34.54 billion, missing estimates by -$29.73 billion. BP p.l.c. (NYSE: BP)'s gross profit margin is 18% and the stock has gained 4.92% in the past 6 months and 22.8% year to date.

As of the end of the first quarter of 2021, 29 hedge funds out of the 866 tracked by Insider Monkey held stakes in BP p.l.c. (NYSE: BP), with a total stake value of about $1.24 billion. This is compared to 29 hedge funds in the previous quarter, with a total stake value of roughly $927 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), BP p.l.c. (NYSE: BP) is a good energy stock to invest in.

9. SolarEdge Technologies, Inc. (NASDAQ: SEDG)

Number of Hedge Fund Holders: 32

SolarEdge Technologies, Inc. (NASDAQ: SEDG) is a renewable energy company that develops DC-optimized inverter systems for solar photovoltaic installations worldwide. It ranks 9th on our list of the best energy stocks to buy now.

This May, SolarEdge Technologies, Inc. (NASDAQ: SEDG) was upgraded to Buy from Neutral at Goldman Sachs, and the firm just raised its price target on the shares this July from $290 to $322 in light of the company’s solid fundamentals. Analyst Brian Lee has commented that supply chain risks for component makers are lessening to an extent because of expansion across the solar sector.

In the first quarter of 2021, SolarEdge Technologies, Inc. (NASDAQ: SEDG) had an EPS of $0.98, and its revenue came in at $405.49 million, beating estimates by $9.92 million. SolarEdge Technologies, Inc. (NASDAQ: SEDG) has gained 66.14% in the past year.

By the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey held stakes in SolarEdge Technologies, Inc. (NASDAQ: SEDG). The total value of their stakes was roughly $420 million. This is compared to the previous quarter’s 28 hedge fund holders with a total stake value of approximately $458 million.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), SolarEdge Technologies, Inc. (NASDAQ: SEDG) is a good energy stock to invest in.

Richie Capital Group, an investment management firm, mentioned SolarEdge Technologies, Inc. (NASDAQ: SEDG) in their first-quarter 2021 investor letter. Here’s what they said:

“Our biggest detractors for the quarter included SolarEdge Technologies (SEDG – down 11.2%) – The Smart Energy solar company declined during the quarter along with most other solar energy stocks due to concerns over higher interest rates. Higher interest rates will make it more expensive for businesses and consumers to borrow money for residential and commercial solar projects. We expect interest rates to be somewhat of a headwind for years to come. However, the stronger underlying trends are in their favor. We expect SEDG to be a net winner from the Biden Administration’s infrastructure plan which focuses on Clean Energy.”

8. Royal Dutch Shell plc (NYSE: RDS)

Number of Hedge Fund Holders: 36

Royal Dutch Shell plc (NYSE: RDS) is an energy and petrochemical company operating worldwide to extract crude oil, natural gas, and natural gas liquids, for transportation and sale. The stock ranks 8th on our list of the best energy stocks to buy now.

This July, Credit Suisse reiterated its Outperform rating on Royal Dutch Shell plc (NYSE: RDS) while JP Morgan also reiterated its Overweight rating on the shares. Jefferies has also commented that Royal Dutch Shell plc (NYSE: RDS) is set to benefit from rising global demand for LNG in the face of lesser supply until 2025.

In the first quarter of 2021, Royal Dutch Shell plc (NYSE: RDS) had an EPS of $1.44, beating estimates by $0.53. The company's revenue was $55.66 billion, surpassing the previous quarter's $43.99 billion revenue, and it has a gross profit margin of 24.47%. The stock has gained 0.32% in the past 6 months and 12.10% year to date.

As of the end of the first quarter of 2021, 36 hedge funds held stakes in Royal Dutch Shell plc (NYSE: RDS) worth roughly $2.19 billion. This is compared to 34 hedge funds in the previous quarter with a total stake value of approximately $1.66 billion.

7. Cheniere Energy, Inc. (NYSE: LNG)

Number of Hedge Fund Holders: 40

Cheniere Energy, Inc. (NYSE: LNG) is an energy infrastructure company engaged in the LNG business of the US. The company ranks 7th on our list of the best energy stocks to buy now.

This June, Citigroup raised its price target on Cheniere Energy, Inc. (NYSE: LNG) from $95 to $115 while keeping its Buy rating on the shares. Analyst Timm Schneider is optimistic about the stock's valuation, believing it can be a $130+ stock.

In the first quarter of 2021, Cheniere Energy, Inc. (NYSE: LNG) had an EPS of $1.92, beating estimates by $1.03. Cheniere Energy, Inc. (NYSE: LNG)'s revenue was $3.09 billion, up 14.06% year over year and beating estimates by $191.25 million, and it has a gross profit margin of 38.42%. The stock has gained 30.28% in the past 6 months and 48.33% year to date.

As of the end of the first quarter of 2021, 40 hedge funds held stakes in Cheniere Energy, Inc. (NYSE: LNG) worth roughly $2.54 billion. This is compared to 38 hedge funds in the previous quarter with a total stake value of approximately $2.27 billion.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), Cheniere Energy, Inc. (NYSE: LNG) is a good energy stock to invest in.

6. Chevron Corporation (NYSE: CVX)

Number of Hedge Fund Holders: 41

Chevron Corporation (NYSE: CVX) works in integrated energy, chemicals, and petroleum operations worldwide. The company is also investing in the renewables sector to reduce the carbon intensity of its operations, and it ranks 6th on our list of the best energy stocks to buy now.

This April, Forbes reported that Chevron Corporation (NYSE: CVX) was the first major US oil company to invest in a renewable energy project through its investment in an offshore wind power project this year. This July, Mizuho raised its price target on Chevron Corporation (NYSE: CVX) to $135 while retaining its Buy rating, and Truist has a $144 price target on the stock with the same rating.

In the first quarter of 2021, Chevron Corporation (NYSE: CVX) had $0.9 in EPS, surpassing the previous quarter's -$0.01 EPS and $32.03 billion in revenue, again crossing the $25.25 billion revenue from the previous quarter. The stock has gained 12.01% in the past 6 months and 21.12% year to date, and the company's gross profit margin is 45.17%.

By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Chevron Corporation (NYSE: CVX). The total value of their stakes was roughly $4.86 billion. This is compared to the previous quarter’s 50 hedge fund holders with a total stake value of approximately $5.39 billion.

Like Exxon Mobil Corporation (NYSE: XOM), Royal Dutch Shell plc (NYSE: RDS), NextEra Energy, Inc. (NYSE: NEE), and First Solar, Inc. (NASDAQ: FSLR), Chevron Corporation (NYSE: CVX) is a good energy stock to invest in.

ClearBridge Investments, an investment management firm, mentioned Chevron Corporation (NYSE: CVX) in their first-quarter 2021 investor letter. Here’s what they said:

“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names, (including) Chevron. We are positive on the company’s strong balance sheets, competitive positions and exposure to an economic recovery.”

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Disclosure: None. 15 Best Energy Stocks to Buy Now is originally published on Insider Monkey.