10 Best Natural Gas Stocks To Invest In According to Hedge Funds

03. Coterra Energy Inc. (NYSE:CTRA)

Number of Hedge Fund Holders: 48

Coterra Energy Inc. (NYSE:CTRA) is a key player in the natural gas industry, making it a solid candidate for inclusion among the best natural gas stocks. With a diversified portfolio that includes significant assets in the Marcellus Shale, Permian Basin, and Anadarko Basin, the company is well-positioned to capitalize on both natural gas and oil markets. As of Q2 2024, 48 hedge funds held positions in the stock, up from 40 in the previous quarter, reflecting growing institutional confidence in the company’s long-term value.

Coterra Energy Inc. (NYSE:CTRA) second-quarter results highlight its financial strength and operational efficiency, even amid fluctuating natural gas prices. The company reported total production of 669 MBoepd, with 2.78 Bcf per day of natural gas production, beating its own guidance in all production streams, including oil, natural gas, and NGLs. Despite a 42% decline in realized natural gas prices between Q1 and Q2, Coterra’s revenue dropped only 12%, demonstrating its resilience in volatile markets. This underscores the strength of its diversified asset portfolio and capital efficiency, positioning the company well for sustained long-term performance.

One of the key reasons Coterra Energy Inc. (NYSE:CTRA) stands out is its disciplined approach to capital allocation. The company’s ability to pivot between its assets in the Marcellus, Permian, and Anadarko Basins allows it to optimize investments based on current market conditions. As natural gas markets face oversupply, Coterra Energy Inc. (NYSE:CTRA) has tactically curtailed production in the Marcellus region to preserve value, while still maintaining strong cash flow projections for 2024.

Financially, Coterra remains robust, with net income of $220 million and adjusted net income of $272 million for the second quarter of 2024. The company also generated $246 million in free cash flow, further enhancing its ability to reward shareholders through dividends and share buybacks. Coterra Energy Inc. (NYSE:CTRA) returned $295 million to shareholders in Q2, representing 120% of its free cash flow, including a $0.21 per share base dividend and the repurchase of 5 million shares. This commitment to shareholder returns is a clear indicator of management’s confidence in the company’s financial stability and future growth. With a healthy balance sheet, a strategic focus on capital discipline, and the ability to navigate near-term market challenges,Coterra Energy Inc. (NYSE:CTRA) is well-positioned for long-term success in the natural gas sector.