In this article, we discuss the 11 best LNG and LNG shipping stocks to buy now. If you want to read about some more LNG and LNG shipping stocks, go directly to the 5 Best LNG and LNG Shipping Stocks to Buy Now.
The United States has witnessed a surge in natural gas production since the fracking boom in the mid-2000s. In October, U.S. liquefied natural gas (LNG) producers substantially increased exports to 7.92 million metric tons, marking the second-highest monthly level on record. While slightly below the record 8.01 million metric tons in April, the October figures reflected an increase from 7.12 million metric tons in September, when plant maintenance led to a reduction in U.S. production. Europe remained the primary recipient of U.S. LNG, constituting 60% of all exports last month—a rise of 8 percentage points. Asian customers accounted for 20% of exports, down from 30% in September, while Latin America received 5% of cargo, down from 8% in the previous month.
Approximately two-thirds of the total U.S. production originates from Texas, Pennsylvania, Louisiana, and West Virginia, typically being transported via pipelines to fuel power plants and heat homes across the nation. Historically, domestic natural gas supply and demand have closely mirrored each other, with international trade involving minimal imports from Canada through pipelines. However, the proliferation of new liquefied natural gas export terminals has transformed these dynamics, increasingly connecting domestic gas prices to global markets. Similar to the impact on crude oil, the growing exports of LNG will lead to U.S. natural gas prices being determined by the international market. This implies that domestic prices will become susceptible to global price fluctuations, extending beyond the influence of domestic consumption and production. Specifically, according to the EIA, the projections indicate that in the scenario of higher volumes of U.S. LNG exports, prices are expected to rise by $1.50 per million British thermal units (MMBtu), equating to approximately a 10% price increase. This increase will be reflected in household natural gas bills, and electricity utility costs, and will have an impact on various manufacturing industries.
Further forecasts from the EIA, utilizing data from the International Group of Liquefied Natural Gas Importers (GIIGNL) and trade press, compare the expected LNG import capacity to the levels in 2022. The analysis has revealed that in the initial seven months of 2023, three countries – Germany, the Philippines, and Vietnam – commenced their first-ever LNG imports. By the close of 2024, the EIA anticipates that Antigua, Australia, Cyprus, and Nicaragua will also initiate their LNG imports, and several other nations are in advanced stages of developing their LNG import infrastructure. To provide further context to this, the global LNG import capacity, often referred to as regasification capacity, expanded by 49%, equivalent to 45.8 billion cubic feet per day (bcf/d), reaching a total of 140 bcf/d across 48 countries. The EIA projects that by the end of 2024, 55 countries will have completed LNG regasification terminals, boasting a combined capacity of 163 bcf/d.
With these details in mind, let’s look at some of the best LNG and LNG shipping stocks in the market, which include the likes of Chevron Corporation (NYSE:CVX), Cheniere Energy, Inc. (NYSE:LNG), and Exxon Mobil Corporation (NYSE:XOM).
Close-up of a liquefied natural gas terminal expelling plumes of smoke.
Our Methodology
For our list of the best LNG and LNG shipping stocks to buy now, we have chosen the most noteworthy LNG companies that are operating in the energy sector. We have organized the list based on the hedge fund sentiment regarding these stocks, as determined from Insider Monkey’s database, which tracks 910 top-tier hedge funds as of the close of the second quarter of 2023.
11. Enbridge Inc. (NYSE:ENB)
Number of Hedge Fund Holders: 35
Enbridge Inc. (NYSE:ENB) is a multinational energy and pipeline corporation headquartered in Calgary, Alberta, Canada. The company boasts an expansive network of pipelines that crisscross Canada and the United States, enabling the conveyance of diverse energy resources, encompassing crude oil, natural gas, and LNG. Furthermore, Enbridge Inc. (NYSE: ENB) is actively engaged in the generation of renewable energy. Notably, Enbridge manages one of the world’s most extensive oil pipeline systems and plays a pivotal role in transporting roughly 30% of the oil produced in North America.
On November 3, Enbridge Inc. (NYSE:ENB) announced third-quarter earnings that exceeded analyst expectations and expressed its ongoing interest in smaller acquisitions while it progresses with the finalization of a $14 billion agreement to acquire three U.S. gas utilities from Dominion Energy, with the deal expected to conclude in 2024. Additionally, the company disclosed agreements to enhance its ownership in German offshore wind projects for 625 million euros ($668.7 million) and to purchase seven U.S. renewable natural gas facilities for $1.2 billion.
Our hedge fund data for the third quarter shows 35 hedge funds holding stakes in Enbridge Inc. (NYSE:ENB). Their total stake value in the company was $401.46 million. Zimmer Partners was the most prominent shareholder in Enbridge Inc. (NYSE:ENB) at the end of the third quarter, holding 4.1 million shares in the company.
Alongside Enbridge Inc. (NYSE:ENB), Chevron Corporation (NYSE:CVX), Cheniere Energy, Inc. (NYSE:LNG), and Exxon Mobil Corporation (NYSE:XOM) are some of the best LNG and LNG shipping stocks to buy.
10. Baker Hughes Company (NASDAQ:BKR)
Number of Hedge Fund Holders: 40
Baker Hughes Company (NASDAQ:BKR) is a corporation incorporated under the Delaware General Corporation Law and is headquartered in Houston. It stands as one of the world’s premier oil field and gas services companies, offering a comprehensive range of services that encompass oil well drilling, formation assessment, completion, production, and reservoir advisory services.
On October 26, Baker Hughes Company (NASDAQ:BKR) revised its full-year revenue projection upward, attributing the increase to robust demand for its LNG equipment. In recent years, Baker Hughes Company (NASDAQ:BKR) has experienced significant advantages from the surging global demand for LNG and the competitive drive to construct new export terminals, along with the post-COVID recovery in oilfield activities. The company now anticipates revenue for the current year to fall within the range of $25.4 billion to $25.8 billion, compared to its previous revenue estimate spanning from $24.8 billion to $26 billion, as conveyed during an earnings call.
At the end of Q3 2023, 40 hedge funds were eager on Baker Hughes Company (NASDAQ:BKR) and disclosed positions worth $625.8 million in the company. As of September 30, Israel Englander’s Millennium Management is the top investor in the company with a position worth $124.13 million.
ClearBridge Mid Cap Growth Strategy made the following comment about Baker Hughes Company (NASDAQ:BKR) in its Q4 2022 investor letter:
“We established a new position in Baker Hughes Company (NASDAQ:BKR), in the energy sector, which provides technological support and services to energy and industrial companies including oilfield services, oilfield equipment, turbomachinery and process solutions and digital solutions. We believe management’s focus on capital discipline has helped streamline their strategic focus and placed greater emphasis on improving cash generation and returns. Additionally, Baker Hughes’ overwhelming market share in the gas turbine and compression business creates a long-term growth runway due to the global buildout of renewable energy projects and rising liquefied natural gas capital expenditures.”
9. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 42
Kinder Morgan, Inc. (NYSE:KMI) stands as one of the premier energy infrastructure companies in North America, renowned for its expertise in the ownership and operation of oil and gas pipelines and terminals. The company holds ownership interests in or manages approximately 83,000 miles of pipelines and oversees 143 terminals.
On November 6, Kinder Morgan, Inc. (NYSE:KMI) entered into an agreement to acquire NextEra Energy Partners LP’s South Texas natural gas pipeline assets for $1.815 billion in cash. The STX Midstream pipeline system links the Eagle Ford Basin to markets in both Mexico and the U.S. Gulf Coast. The assets involved in this deal comprise a 90% ownership stake in the NET Mexico pipeline and a 50% interest in Dos Caminos LLC. Notably, this transaction marks Kinder Morgan’s sixth acquisition in the past three years.
As of the end of the September quarter of 2023, 42 hedge funds tracked by Insider Monkey reported having stakes in Kinder Morgan Inc. (NYSE:KMI), up from 36 in the previous quarter. The collective value of these stakes is nearly $769.6 million.
8. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 45
Established in 1989, Chesapeake Energy Corporation (NASDAQ:CHK) is dedicated to the exploration and responsible development of key assets situated in three prominent U.S. oil and gas regions: the Eagle Ford, Haynesville, and Marcellus Shales. The company’s headquarters are located in Oklahoma City, recognized as a major hub for the natural gas and oil industry. Throughout the entirety of 2022, Chesapeake Energy Corporation (NASDAQ:CHK) achieved a daily production rate of approximately 4.0 billion cubic feet equivalent (bcfe) per day. This production primarily consisted of approximately 90% natural gas and 10% total liquids.
On November 1, Chesapeake Energy Corporation (NASDAQ:CHK) reached an agreement to provide Swiss energy company Vitol with up to one million tons per annum of LNG through a newly executed Heads of Agreement (HOA). Chesapeake Energy Corporation (NASDAQ:CHK) and Vitol will collaborate to select the most suitable liquefaction facility in the United States for processing the gas produced by Chesapeake Energy Corporation (NASDAQ:CHK), with the intention of supplying it to Vitol. The commencement of supply is anticipated to take place in 2028.
As of the end of the third quarter of this year, Insider Monkey’s survey of 910 hedge funds identified 45 that had invested in Chesapeake Energy Corporation (NASDAQ:CHK). Among these, the largest stakeholder is Oaktree Capital Management, led by Howard Marks, with holdings valued at $603.6 million.
7. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 49
Shell plc (NYSE: SHEL) is a global energy behemoth known for its prominent presence in the liquefied natural gas market. Its integrated gas division, prominently featuring LNG operations, has been the primary contributor to the company’s profits in four out of the last five years. This segment accounted for slightly over half of the company’s $14.7 billion in earnings during the first half of 2023. The company is actively working to further diversify its LNG export portfolio, having applied for a U.S. government license that would permit LNG exports to countries not covered by free trade agreements with the U.S.
During this year’s September quarter, 49 hedge funds out of the 910 that were polled by Insider Monkey had invested in Shell plc (NYSE:SHEL). The company’s biggest hedge fund shareholder is Ken Fisher’s Fisher Asset Management through a $1.44 billion stake that comes courtesy of 22.39 million shares.
6. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 52
Devon Energy Corporation (NYSE:DVN) is a company primarily engaged in hydrocarbon exploration within the United States. It is registered in Delaware and maintains its primary corporate headquarters at the Devon Energy Center, a 50-story skyscraper located in Oklahoma City, Oklahoma. In the second quarter, the company generated over $1.4 billion in operating cash flow and distributed $690 million to its shareholders through dividends and stock buybacks.
Devon Energy Corporation (NYSE:DVN) announced on August 1 that it intends to issue its regular quarterly dividend of $0.20 per share, along with an additional dividend of $0.29 per share, resulting in a combined quarterly dividend of $0.49 per share.
Among the 910 hedge funds monitored by Insider Monkey, 52 of them held stakes in Devon Energy Corporation (NYSE: DVN). The largest stake in Devon Energy Corporation (NYSE:DVN) was held by Donald Yacktman’s Yacktman Asset Management, which possesses a $145.2 million stake in the company.
Devon Energy Corporation (NYSE:DVN) ranks as one of the best LNG stocks to invest in, alongside the likes of Chevron Corporation (NYSE:CVX), Cheniere Energy, Inc. (NYSE:LNG), and Exxon Mobil Corporation (NYSE:XOM).
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Disclosure: None. 11 Best LNG and LNG Shipping Stocks To Buy Now is originally published on Insider Monkey.
