It is also active in corporate mergers and the acquisition of oil and natural gas properties. The company’s reserve portfolio consists of assets in the Midland Basin of West Texas, and the Eagle Ford Trend of South Texas. Its operations are all in the upstream segment of the oil and natural gas industry and are conducted onshore in the United States.
The company reported Q4 revenues of $7.9 billion, up 27% year-over-year, driven by a jump in its international revenues, which grew 26%. Diluted earnings came in at 74 cents per share, an increase of 76% year-over-year. The energy sector finished the year up nearly 60% – easily outperforming the broader equities market. While the hydrocarbon space carries a reputation for generous passive income opportunities, BSM stands out.
While that assumes competitive natural gas pricing at early 2022 levels, the company also uses hedges to help mute the impact of volatility. At the end of Q4, the oil refinery had a total debt of $9.2 billion and cash and cash equivalents of $4.9 billion, with a debt to capitalization ratio, net of cash and cash equivalents of approximately 21%. In contrast, the company had a debt-to-capitalization ratio of 40% as of March 31, 2021. COP anticipates 2023 oil production to be 1.7 6million barrels of oil equivalent a day at the midpoint. The company’s full-year capex guidance is between $10.7 billion and $11.3 billion.
One secret to uncovering the best natural gas stocks is to focus on the lowest-cost producers. These companies should still be able to make money when prices decline. Another critical criterion is finding gas producers that have strong balance sheets, giving them the financial flexibility to withstand economic turbulence.
Investing in natural gas infrastructure companies that own pipelines and LNG export facilities is an alternative. Infrastructure companies should benefit from growing gas demand without direct exposure to pricing. In addition, infrastructure companies tend to pay attractive dividends. Pipeline companies must build and operate the midstream infrastructure, such as pipelines, processing plants, and storage facilities, to transport gas from production basins to end markets. Meanwhile, natural gas needs to become a liquid for transportation overseas. Kinder Morgan allocates its cash flow toward paying a high-yielding dividend, repurchasing shares, and expanding its natural gas network through capital projects and acquisitions.
Jeffries analyst Lloyd Byrne has a Buy rating and a $210 price target on LNG stock. Gurufocus labels TPL “modestly overvalued,” warning investors they’ll pay a premium for shares. And its P/E and forward P/E ratios are among the highest in the industry. Yet, Texas Pacific stands out among the best natural gas stocks to buy for its financial strength. Now, onto the main reasons why MTDR ranks among the best natural gas stocks to buy.
Kinder Morgan is a leader in operating energy infrastructure in North America. It controls the nation’s largest natural gas transmission network, which moves 40% of the natural gas produced in the U.S. As of early 2023, it had 70,000 miles of natural gas pipelines to go along with 700 billion cubic feet of storage capacity — the latter representing about 15% of the U.S. storage total. Kinder Morgan’s infrastructure connects every major natural gas resource play to key demand centers.
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The Lower 48 is COP’s largest business segment based on oil production, with 10.8 million net acres. In January, Phillips increased its economic interest in this venture to 86.8%. DCP Midstream is a master limited partnership between PSX and Enbridge.
Its forward yield of 11.1% is well above the energy sector’s average yield of 4.2%. However, sustainability questions will cloud this dividend, as the payout ratio of 86% is on the high side. If you want to invest in cleaner sources of energy with more diversification built into a single investment, you may want to look into Q.ai’s Clean Tech Kit. Our artificial intelligence scours the markets for the best investments for all manner of risk tolerances and economic situations.
Best Natural Gas Stocks To Invest In for 2023
Note Tellurian doesn’t have an EPS growth figure in the table above because the company reported negative EPS in the most recent quarter. Shares have fallen 16% over the past year after tripling in the first half of 2022 alongside soaring energy prices. The company bought Stagecoach Gas Services, a pipeline and storage network in the Northeast, for $1.22 billion.
If you’re looking for value stocks — those that produce income for investors in the form of a dividend — there are a few in the natural gas industry. Hess Corp., Civitas Resources Inc., and Permian Resources Inc. are among the top-performing natural gas stocks over the past year, all up by 30% despite falling natural gas prices. The benchmark First Trust Natural Gas ETF declined by 7% in the last year, while the Russell 1000 Index fell 8%.
Adjusted earnings came in at $4.00 per share, up 36% over the year prior. Shares of SLB are up more than 16% over the past year, driven by higher oil prices and solid quarterly results. On the profitability side, WDS has a net margin of 31.7%, better than nearly 83% of the industry.
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For starters, Europe’s price caps still need a “qualified majority” of 15 countries representing at least 65% of Europe’s population to agree to them before they can be implemented. Furthermore, the measure, which is meant to soften the consequences of Russia’s invasion of Ukraine, may backfire. With gas traders fearing losses, they could end their activities, resulting in supply shortages and causing prices to jump — exactly what the caps were meant to prevent. AI technology is here to stay, so companies that utilize it should be well positioned for the future.
But its P/E ratio of 5.4 rates favorably below the industry median of 8.2. Where the company really attracts attention as one of the best natural gas stocks to buy, though, is its strong growth and profitability metrics. Antero Resources, headquartered in Denver, handles exploration and production of natural gas and natural gas liquids in the United States and Canada.
These would pile on top of one another and mix with silt, sand and carbon calcite to create an immense amount of pressure. This pressure caused some of the organic material to change the carbon and hydrogen into natural gas. Other pockets of organic material became coal, petroleum and other fossil fuels. Cheniere Energy Inc. is the leading producer and exporter of liquefied natural gas in the U.S. It provides reliable, clean and affordable solutions to the growing needs of natural gas.
Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers. Neal Dingmann, Truist’s top-rated analyst, is bullish on the stock, with a Buy rating and a price target of $151. «ConocoPhillips’s growth for the foreseeable future is tied to unconventional, which comes primarily from the Permian, distantly followed by the Eagle Ford, and Montney,» Dingmann writes in a note. «The company also has attractive assets in Alaska, which could add additional growth. We rate the shares Buy given the dividend we believe sustainable and strong FCF yield.»
Chesapeake Energy (NASDAQ:CHK)
Two months ago, MTDR was considered “modestly overvalued,” according to GuruFocus’ proprietary calculation. It’s expected that the global demand for LNG could grow for a long period as it could double to more than 700 million tons per annum by 2040. This means that companies involved in natural gas should increase revenue. The main disadvantage of natural gas is that it must travel through pipelines, which can pose a range of logistical and environmental challenges, particularly across oceans.
So if you want to participate in the natural gas industry but don’t want to have to decide on a single stock, this might be worth a look. Cheniere has exhibited steady gains in revenues since the third quarter of 2020. In Q4 2022, the company’s revenues were up 39% year-over-year to $9.1 billion. LNG has benefitted from the rising price of natural gas globally, along with increasing exports to Europe in recent weeks. The total volume of gas exported in the fourth quarter was 600 trillion Btu, up from 540 trillion in the same period last year. The company continued to generate strong free cash flows of $1.7 billion in Q4.