In this article, we are going to discuss the 11 best natural gas stocks to buy now.
The United States of America is the Top Natural Gas Producing Country in the World, courtesy of horizontal drilling and hydraulic fracturing techniques, notably in shale, sandstone, carbonate, and other tight geologic formations. The country’s dry natural gas production reached 103.6 billion cubic feet per day (bcfd) in 2023, up 4.3% from 2022 and the highest for any year on record, dating back to 1930, according to 2023 Natural Gas Annual. The US was also a net exporter of natural gas for the seventh consecutive year in 2023, transporting gas to 42 countries during the year.
READ ALSO: 10 Best Liquefied Natural Gas (LNG) Stocks to Buy in 2025
After a stellar 2023, the US natural gas output slumped slightly last year due to prices falling to multi-decade lows, but production is expected to climb to 104.5 bcfd in 2025, as a period of strong demand and improved prices spark a resurgence in production. Analysts expect average annual gas prices to increase by more than 40% this year over the levels seen in 2024, as demand is projected to grow mainly due to a jump in LNG exports. The demand surge is largely attributed to new LNG export facilities, like Plaquemines LNG and Corpus Christi Stage 3, coming online, while the Golden Pass LNG project is also anticipated to begin operations by mid-2026.
Europe remains a top destination for American liquified natural gas. The continent has had to rely significantly more on imported LNG and less on gas delivered via pipelines from Russia since the Putin government’s invasion of Ukraine in 2022. The American LNG sector is also set to receive a significant boost after President Donald Trump issued an order last month to lift a freeze on new US licenses to export liquefied natural gas, making good on a campaign pledge to rescind the measure.
The country’s natural gas sector is also expected to benefit significantly from the ongoing AI boom and the accompanying data centers, as several dozen new gas-fired power plants are expected to be built in the US in the next few years. According to energy data provider Enverus, a total of 80 new gas power plants could be constructed in America by 2030, adding about 46 GW of new capacity – 20% higher than the gas capacity additions in the last five years. According to data from S&P Global Commodity Insights, if even a quarter of the projected data center load is supplied by gas-fired generation, this would translate to a 2% increase in total US gas demand in 2040.
The energy sector has witnessed considerable fluctuations over the last few months, surging by over 6% in November before declining around 10% in December. However, the broader energy sector (roughly 1/3rd of which is made up of natural gas companies) ended last year with a return of just 5.72%, significantly lagging behind gains of 25% by the wider market.
With that said, here are the Best Natural Gas Stocks to Invest in.
A large natural gas pipeline running through a rural landscape with mountains in the background.
Methodology:
To collect data for this article, we scanned Insider Monkey’s database of 900 hedge funds and picked the top 11 companies operating in the natural gas sector with the highest number of hedge fund investors in Q3 of 2024. When two or more companies had the same number of hedge funds investing in them, we ranked them by the revenue of their last financial year. Following are the Best Natural Gas Stocks to Buy According to Hedge Funds.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
11. Antero Resources Corporation (NYSE:AR)
Number of Hedge Fund Holders: 39
Antero Resources Corporation (NYSE:AR) is an independent natural gas and liquids company operating in the Appalachian Basin. Headquartered in Denver, the company is one of the largest US suppliers of natural gas and LPG to the global export market.
Antero Resources Corporation (NYSE:AR) reported a revenue of $1.17 billion in Q4 of 2024, down 2.13% YoY but still above market consensus by over $340,000. The company reported impressive cost efficiency during the quarter, with drilling and completion capital expenditures of $120 million, 27% below the prior year period. Moreover, Antero added approximately 4,200 net acres in Q4, representing 15 incremental drilling locations and bringing the total to 59 new locations in 2024. The company reported a free cash flow of $159 million in Q4 and has outlined a $1.6 billion free cash flow projection for 2025 amid improved efficiency and rising demand.
Antero Resources Corporation (NYSE:AR) is benefiting greatly from the expanding LNG export trend as almost 75% of the company’s gas volumes are sold to markets on the Gulf Coast. Since 2021, Antero’s exports have surged by 46%, driven by resilient international demand, particularly from Asia.
Shares of Antero Resources Corporation (NYSE:AR) were held by 39 hedge funds in the IM database at the end of Q3 2024, with Sourcerock Group holding the largest stake of over 6.12 million shares, valued at $175.47 million.
Antero Resources Corporation (NYSE:AR) has surged by over 80% over the last year, putting it among the 12 Hot Oil Stocks to Buy According to Hedge Funds.
10. Coterra Energy Inc. (NYSE:CTRA)
Number of Hedge Fund Holders: 39
Coterra Energy Inc. (NYSE:CTRA) is a premier energy company with exposure to natural gas, natural gas liquids, and oil, and operations focused in the Permian Basin, Marcellus Shale, and Anadarko Basin.
Coterra Energy Inc. (NYSE:CTRA) had a mixed Q3 2024 as it achieved a 22.2% rise in oil production to 112.3 million barrels per day. However, this was offset by a decline in natural gas output and weaker commodity prices, causing the company to miss estimates for profits. However, Coterra signed three new LNG deals during the quarter to sell a total of 200 mmcfd (million cubic feet per day) of natural gas, with first sales in 2027 and 2028. The energy company also announced a $0.21 per share dividend for Q3 and returned $265 million to shareholders during the quarter in total, equating to 96% of its free cash flow. CTRA remains committed to its strategy of returning 50% or more of its annual free cash flow to shareholders through a combination of dividends and share repurchases.
It was announced last month that Coterra Energy Inc. (NYSE:CTRA) has completed the $3.9 billion acquisition of assets from privately held Avant Natural Resources and Franklin Mountain Energy, further expanding its presence in the prolific Permian Basin. The deals mark the first acquisitions made by Coterra since its creation and will add about 60,000 to 70,000 barrels of oil equivalent per day to its output in 2025.
