The 3 Best Energy Stocks to Buy in February 2024
When major oil-producing nations attempted to bid up the price of crude through coordinated production cuts, circumstances appeared bullish for the best energy stocks to buy – particularly those tied to the hydrocarbon space. However, that narrative didn’t pan out as other factors such as broader economic concerns weighed on the sector.
Nevertheless, investors shouldn’t ignore the best energy stocks to buy. Indeed, the present juncture may be the time to reconsider the bullish narrative. For one thing, we avoided a recession last year and recent data seemingly confirm credibility for the optimistic outlook. With the U.S. GDP coming in red hot in the fourth quarter and with the labor market continuing to astound onlookers, more people have more money to spend.
Fundamentally, that should be beneficial for myriad energy plays, not just the crude oil market. And with society normalizing, elements such as natural population growth and immigration should return to normal levels. That spells more resource consumption, which cynically bodes well for the below best energy stocks to buy.
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Occidental Petroleum (OXY)
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While we’ve all heard the mantra that electric vehicles are the future, that narrative has come under question recently. With EVs struggling – badly in some cases – during the extreme winter cycle this year, Occidental Petroleum (NYSE:OXY) looks mighty interesting. Sure, the hydrocarbon exploration and production (upstream) giant may be an old-school business. Still, it gets the job done.
Fundamentally, the harsh reality is that the world runs on oil. By supplying 33% of all energy, oil represents the world’s primary fuel. That may change over time but the process won’t happen overnight. In addition, OXY enjoys top-level endorsement. One of the top inside buyers of the enterprise is Berkshire Hathaway (NYSE:BRK-B). Thus, any enterprise that Warren Buffett supports deserves special consideration.
Overall, TipRanks notes that insider confidence for OXY stock is “positive.” For those who are a bit pensive, Occidental sweetens the pot with a forward yield of 1.53%. Lastly, analysts rate shares a consensus moderate buy with a $68.42 average price target. Therefore, OXY makes a solid case for best energy stocks to buy.
Cameco (CCJ)
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As the world’s largest publicly traded uranium company, Cameco (NYSE:CCJ) always commanded relevance. According to the International Energy Agency, nuclear power provides about 10% of global electricity generation. It’s also an important low-emission source of electricity. So, even without the recent drama in the uranium space, CCJ was printing a solid chart performance last year.
Of course, Cameco hit high gear when a critical supply disruption impacted the underlying ecosystem. According to The Wall Street Journal, Kazakhstan’s state uranium company Kazatomprom warned earlier this year that it probably won’t hit output targets over the next two years. Suddenly, nuclear energy players had to scramble for new supply sources.
Exacerbating the matter is that the nuclear industry can’t just switch from uranium to other radioactive materials. And while alternatives like thorium have been proposed, they might not be particularly effective. Essentially, nuclear power players must pay up or go out of business.
Cynically, this dynamic may help lift CCJ stock even further. Analysts peg shares a consensus strong buy with a $53.89 target, making Cameco one of the best energy stocks to buy.
Canadian Solar (CSIQ)
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One of the riskiest ideas for best energy stocks to buy, investors should approach Canadian Solar (NASDAQ:CSIQ) with caution. On paper, the solar photovoltaic (PV) module manufacturer and large-scale solar project manager aligns with ideological and political directives. By offering a clean and sustainable energy source, those on the left are happy about meeting climate goals. And on the right, increased solar projects reduce foreign energy dependency.
However, the market hasn’t been happy with CSIQ stock overall. In the past one-year period, the company suffered a sizable loss. It’s also not getting off to the best start in the new year. Nevertheless, certain circumstances are improving. For example, the solar industry suffered badly because of the combination of high inflation and high interest rates.
Basically, on both ends – the business side and the consumer side – Canadian Solar saw major headwinds. However, with the possibility of some relief in borrowing costs, circumstances may improve for CSIQ stock. Analysts are hoping exactly that, rating shares a moderate buy with a $31.57 average price target.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
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