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.
9. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 42
Kinder Morgan, Inc. (NYSE:KMI) is one of the largest energy infrastructure companies in North America. The company operates the largest natural gas transmission network in the US with 83,000 miles of pipelines, 141 terminals, and 700 billion cubic feet of working natural gas storage capacity. KMI makes its money typically by charging fees for the use of the capacity of its pipelines, terminals, and other assets.
Kinder Morgan, Inc. (NYSE:KMI) reported a revenue of $3.99 billion for Q4 of 2024, down from consensus estimates by $148.6 million, as it struggled with lower crude and condensate volumes transported through its pipelines. However, the company’s financial position remained strong as it generated $5.6 billion in operating cash flow and decreased its debt by $112 million during the year. KMI announced a quarterly dividend of $0.2875 per share, and as its new assets get integrated, the company’s dividend growth rate could be much higher in the future.
In the past few months, Kinder Morgan, Inc. (NYSE:KMI) has secured enough commercial contracts with customers to approve about $5 billion in new large-scale natural gas pipeline projects. It was announced this week that Entergy Texas has reached a transportation agreement with KMI to secure a steady natural gas supply, supporting industrial, commercial, and residential growth in Southeast Texas. The landmark arrangement, which was developed in collaboration with Golden Pass LNG, is part of KMI’s $1.7 billion Trident Intrastate Pipeline project. Expected to be operational in early 2027, the pipeline is expected to carry approximately 1.5 billion cubic feet per day of natural gas, with further possible expansions, ensuring a reliable gas supply for decades to come.
8. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 46
Next on our list of the Best Natural Gas Stocks is EOG Resources, Inc. (NYSE:EOG), one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the US and Trinidad.
EOG Resources, Inc. (NYSE:EOG) reported exceptional results during Q3 2024 with peer-leading US price realizations of $76.95 per barrel of oil and $1.84 per Mcf for natural gas. Moreover, the company’s oil production midpoint increased by 800 barrels per day, natural gas liquids by 2,800 per day, and natural gas by 24 million standard cubic feet per day. The company boasted revenue of $5.97 billion during the quarter, down almost 4% YoY but still above analysts’ estimates by $14.25 million.
EOG Resources, Inc. (NYSE:EOG) boasts a robust balance sheet and since the end of 2020 through Q3 2024, it generated more than $22 billion in free cash flow and more than $25 billion in adjusted net income. The company has also increased its regular dividend rate by 160% and has paid or committed to pay more than $13 billion directly to shareholders and $3.2 billion indirectly through share repurchases, all while reducing debt by 35%. The company has never reduced or suspended its regular dividend in the last 27 years and raised its quarterly dividend by 7.1% to $0.975 per share in November.
As a result, EOG Resources, Inc. (NYSE:EOG) was included among the 13 Best Natural Gas and Oil Dividend Stocks To Buy.
7. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 48
EQT Corporation (NYSE:EQT) is the leading natural gas producer in the US with production and midstream operations focused in the Appalachian Basin. The company closed its strategic acquisition of Equitrans Midstream last year, which has transformed EQT into America’s only large-scale vertically-integrated natural gas business.
EQT Corporation (NYSE:EQT) is one of the lowest-cost natural gas producers in the world, de-risking its business in the low parts of the commodity cycle while also enabling the company to fully take advantage of higher price environments by eliminating the need to defensively hedge longer-term. The natural gas giant reported a revenue of $1.28 billion in Q3 2024, up 8.24% YoY but still below consensus by a little over $110 million. The company also announced a free cash flow of $121 million during the quarter and recently strengthened its balance sheet with the $1.25 billion divestiture of its remaining non-operated natural gas assets in Northeast Pennsylvania to Equinor. EQT remains committed to returning value to its shareholders and announced a quarterly dividend of $0.1575 per share earlier this month.
EQT Corporation (NYSE:EQT) also recently announced that it has become the first traditional energy producer of scale in the world to achieve net zero Scope 1 and 2 greenhouse gas emissions. The company eliminated or offset over 900,000 metric tons of carbon dioxide emissions in just five years, which is equivalent to taking approximately 195,000 cars off the road annually.
6. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 48
Shell plc (NYSE:SHEL) is an integrated energy company employing 103,000 people and with operations in more than 70 countries. The company has over 50 years of experience as a producer of natural gas and today it is one of the leading producers in Europe. Moreover, Shell has a world-leading LNG business with a sizeable portfolio, a diverse network of customers around the world, extensive shipping and storage assets, and access to regasification plants.
Shell plc (NYSE:SHEL) reported revenue of $66.28 billion in Q4 2024, down 15.8% YoY and missing analysts’ estimates by over $5.5 billion, primarily due to declining oil and gas prices and falling oil demand. However, cash delivery remained solid and the oil and gas giant generated a free cash flow of $40 billion in 2024, higher than in 2023, despite the lower price environment. As a result, Shell announced a 4% increase in its dividends and another $3.5 billion buyback program, making it the 13th consecutive quarter of at least $3 billion of buybacks.
It was reported in December 2024 that Shell plc (NYSE:SHEL) will combine its UK offshore oil and gas assets with Equinor to form a new company that will be the UK North Sea’s biggest independent producer, with a combined estimated output of 140,000 barrels of oil equivalent per day in 2025.
Shares of Shell plc (NYSE:SHEL) were held by 48 hedge funds at the end of Q3 2024, with Fisher Asset Management holding the largest stake valued at over $1.56 billion.
5. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 62
Headquartered in Texas, Cheniere Energy, Inc. (NYSE:LNG) is the largest producer of LNG in the United States and the second-largest LNG operator in the world. Cheniere’s energy infrastructure represents over $38 billion investment in the future of energy, supplying LNG to dozens of markets on five continents.
During Q3 of 2024, Cheniere Energy, Inc. (NYSE:LNG) reported a revenue of $3.76 billion, down 9.5% YoY and missing consensus estimates by over $16 million, primarily due to declining international LNG and gas prices. The company generated $2.7 billion of distributable cash flow during the first nine months of 2024, allowing it to repurchase $2 billion of shares and repay $450 million of long-term debt. Cheniere also declared a quarterly dividend of $0.5 per share in January and intends to follow through with its guidance of growing its dividend by approximately 10% annually through the end of this decade.
After President Trump ended the pause on permits for new LNG export projects, more and more Indian oil firms are interested in buying LNG from the US. It was reported this week that Indian Oil is in talks with Cheniere Energy, Inc. (NYSE:LNG) to sign a 15-year LNG deal, with volumes between 1.5 million to 2 million metric tons annually, beginning in April 2027. India, along with other Asian buyers, is looking to secure more energy deals with the United States to avoid the tariff spree of the Trump administration.
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 63
Chevron Corporation (NYSE:CVX) manufactures and sells a range of high-quality refined products, including gasoline, diesel, marine and aviation fuels, premium base oil, finished lubricants, and fuel oil additives. The company owns five US fuel refineries and has a network of Chevron and Texaco service stations.
Chevron Corporation (NYSE:CVX)’s heavy investments in its fossil fuel portfolio are paying off and the oil and gas major produced a record 3.3 million barrels of oil equivalent per day in 2024, 7% more than the previous year. The company also started up several key projects, including the industry-first, high-pressure Anchor project in the Gulf of America. Chevron delivered an operating cash flow of $31.5 billion and repurchased over $15 billion of its shares in 2024, extending its track record of repurchasing shares in 17 out of the last 21 years. The company also announced a 5% increase in its quarterly dividend to $1.71 per share, marking the 38th consecutive year with an annual increase in dividend payment per share.
Chevron Corporation (NYSE:CVX) is aiming for $2-3 billion of structural cost reductions by the end of next year. The company recently announced that it plans to slash its workforce by as much as 20% (around 9,000 layoffs) by the end of 2026, a move that it deems necessary ‘to improve the long-term competitiveness of the company for its people, its shareholders, and its communities’.
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 66
Ranked at number 3 in our list of the Best Natural Gas Stocks to Buy is ConocoPhillips (NYSE:COP), one of the world’s largest independent E&P companies based on oil and natural gas production and proved reserves. Headquartered in Texas, the company explores for, produces, transports, and markets crude oil, bitumen, natural gas, natural gas liquids, and LNG on a worldwide basis.
ConocoPhillips (NYSE:COP) delivered a strong performance in 2024 as it increased its total production by 4% YoY and closed the $22.5 billion acquisition of Marathon in late November, which added high-quality, low-cost supply inventory to its portfolio. The company also returned $9.1 billion of capital to its shareholders during the year, representing 45% of its operating cash flow and well above the 30% commitment. CP remains committed to its shareholders and announced a target to return $10 billion in 2025, assuming current commodity prices. The company has also declared its ordinary dividend of $0.78 per share for Q1 of 2025 and boasts a dividend yield of 3.22% as of February 13, 2025.
ConocoPhillips (NYSE:COP) is committed to reducing its carbon footprint, having achieved the Oil and Gas Methane Partnership 2.0 Gold Standard designation in 2024. The company’s medium-term targets include reducing greenhouse gas emissions intensity by 50 to 60% by 2030 and achieving a near-zero methane emissions intensity by the end of the decade.
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 71
Occidental Petroleum Corporation (NYSE:OXY) is one of the largest oil and gas producers in the United States. With a position of approximately 2.8 million net acres in Texas and New Mexico, the company’s combined Permian Basin portfolio of conventional and unconventional acreage differentiates it from its competitors.
Occidental Petroleum Corporation (NYSE:OXY) completed the $12 billion acquisition of CrownRock last year, significantly expanding its footprint in the Permian and Midland basins. While the acquisition price included CrownRock’s existing debt of $1.2 billion, OXY funded the acquisition with $9 billion of new debt. This, coupled with declining oil prices, caused the company’s share price to fall by over 17% in 2024. However, thanks to its CrownRock acquisition, the oil major’s Q3 oil production rose 15.7% to 1.4 million barrels of oil and gas per day. It also managed to generate $1.5 billion of free cash flow before working capital, exceeding guidance in all three segments. OXY also repaid $4 billion of debt during the quarter and remains fully committed to achieving its medium-term principal debt target of $15 billion.
Another thing to note is that despite the falling stock price of Occidental Petroleum Corporation (NYSE:OXY) last year, Warren Buffett’s Berkshire Hathaway consistently bought shares in the company throughout 2024, even in the $60s per share price range, further reinforcing confidence in the OXY’s long-term potential.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Topping our list of the Best Natural Gas Stocks to Invest in is Exxon Mobil Corporation (NYSE:XOM), one of the largest integrated fuels, lubricants, and chemical companies in the world with operations in more than 60 countries.
Exxon Mobil Corporation (NYSE:XOM) announced the acquisition of Pioneer Natural Resources in a massive $59.5 billion all-stock deal last year. The venture seems to be paying off as the oil major achieved record production in Permian and Guyana and delivered an industry-leading financial performance in 2024, reporting over $33 billion in earnings and $55 billion in cash flow from operations. Exxon’s strong balance sheet allowed it to pay $16.7 billion in dividends and buy back $19.3 billion in stock, reaffirming its plans to spend $20 billion on buybacks per year through at least 2026.
Exxon Mobil Corporation (NYSE:XOM) announced in December 2024 that its annual project spending will rise to between $28 billion and $33 billion between 2026 and 2030, with a goal of increasing its oil and gas output by 18%. The company has a target of more than tripling its production in the Permian and producing 1.3 million bpd from its highly lucrative operations in Guyana. As a result, XOM is expecting to deliver incremental growth potential of $20 billion in earnings and $30 billion in cash flow by the end of the decade, allowing it to keep its commitment to sustainable, competitive, and growing shareholder returns.
Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the best natural gas stocks to buy now. While we acknowledge the potential for XOM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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