In this article, we discuss the 12 best energy stocks for 2022. You can skip our comprehensive analysis of the energy industry and go directly to 5 Best Energy Stocks for 2022.
According to the World Energy Outlook report 2021 by International Energy Agency, demand for oil and gas will continue to rise till 2030. The growing energy security crisis in the wake of the recent Russia-Ukraine conflict has further aggravated the demand for energy. Oil and gas stocks can gain even more attention following the Biden administration’s plan to lease 144,000 acres of public land to the energy industry for exploration and drilling.
How Sanctions on Russia May Affect Energy Prices Globally?
According to International Energy Agency, Russia is the third-largest supplier of oil after the U.S. and Saudi Arabia and the largest exporter of natural gas in the world. Additionally, the OECD-Europe countries survive on 74% natural gas, 49% crude oil and condensate, and 32% coal from Russia according to the U.S. Energy Information Administration (EIA) data. Therefore, the removal of Russia from the global energy supply chain will continue to push energy prices up. Oil and gas prices saw hikes following the Russian invasion of Ukraine and subsequent sanctions on Russia. According to stats from U.S. EIA, the price of Brent crude oil rose to an average price of $117 per barrel in March, a $20/b increase from February. Similarly, in March, the natural gas price averaged $4.90 per MMBtu, which was significantly higher than the average price in February. Furthermore, the data shows that Brent’s average price is not going to go below $108/b in the second quarter of this year.
Why are Renewable Energy Stocks a Good Choice for Investors?
The global energy supply and security challenges in the oil and gas sector along with the initiatives regarding climate change have given renewable energy stocks an opportunity to step in to enhance renewable energy share from the current 19% to 79% by 2050 in the global energy mix. The growth in the renewable energy industry is primarily necessary to meet targets of reduction in CO2 emission under climate change accords, as it is defined in World Energy Transitions Outlook (WETO) 2022 by International Renewable Energy Agency.
Some of the top energy stocks investors are watching amid the current global turmoil include Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP), and Devon Energy Corporation(NYSE:DVN) in oil and gas sector and NextEra Energy, Inc. (NYSE:NEE) and Enbridge Inc (TSE:ENB) in the renewable energy sector, among others, as discussed below in detail.
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Our Methodology
We analyzed the database of over 900 hedge funds tracked by Insider Monkey and picked some of the most popular energy stocks among these money managers.
Best Energy Stocks for 2022
12. Enbridge Inc (TSE:ENB)
Number of Hedge Fund Holders: 21
Enbridge Inc (TSE:ENB) is a Canadian multinational natural gas distribution company.
Recently, BMO Capital analyst Ben Pham raised the firm’s price target on Enbridge Inc (TSE:ENB) to C$59 from C$57. Ben Pham has maintained an ‘Outperform’ rating on the company’s shares. Similarly, National Bank analyst Patrick Kenny maintained the ‘Outperform’ rating on Enbridge Inc (TSE:ENB) while raising the bank’s price target from $56 to $57 on the organization’s shares.
Enbridge Inc (TSE:ENB) surprised analysts during the fourth quarter of 2021. The actual revenue of the company was recorded as $9.82 billion beating the estimated revenue by 54.75%. According to Insider Monkey’s database, 21 hedge funds held stakes worth roughly $550 million in the company at the end of Q4 2021.
11. Philips 66 (NYSE:PSX)
Number of Hedge Fund Holders: 41
Philips 66 (NYSE: PSX), a Texas-based multinational energy company, is a diversified energy manufacturing and logistics company that transports, stores, and markets fuels worldwide.
During the last few weeks, several analysts have raised the price targets on Philips 66 (NYSE: PSX). On April 18, Piper Sandler analyst Ryan Todd raised the price target on Philips 66 (NYSE: PSX) to $119 from $107 while maintaining an ‘Overweight’ rating on its shares. Similarly, considering the company’s earnings surprise and dividend increase in the last quarter of 2021, RBC Capital analyst Elvira Scotto raised the price target on Philips 66 (NYSE: PSX) to $101 from $97 and maintained an ‘Outperform’ rating on the shares of the organization.
The hedge fund sentiment remained bullish for Philips 66 (NYSE: PSX) at the end of the fourth quarter of 2021. According to the Insider Monkey’s database, 41 hedge funds held stakes worth $927.41 million at the end of the fourth quarter of 2021.
10. Marathon Petroleum Corporation (NYSE:MPC)
Number of Hedge Fund Holders: 41
Marathon Petroleum Corporation (NYSE:MPC) occupies the 10th slot in our list of best energy stocks for 2022. Marathon Petroleum Corporation (NYSE:MPC) is an Ohio-based American petroleum refining, marketing, and transportation company.
Analysts have been giving positive ratings to Marathon Petroleum Corporation (NYSE:MPC) throughout the first quarter of 2022. On April 22, Morgan Stanley analyst Connor Lynagh raised the price target on Marathon Petroleum Corporation (NYSE:MPC) to $115 from $90 and kept an Overweight rating on the shares. On the same day, Piper Sandler analyst Ryan Todd also raised his firm’s price target on Marathon Petroleum Corporation (NYSE:MPC) to $96 from $76.
According to the data from Insider Monkey’s database, 41 hedge funds held stakes worth $2.22 billion in Marathon Petroleum Corporation (NYSE:MPC) at the end of Q4 2021.
9. Pioneer Natural Resources Company (NYSE:PXD)
Number of Hedge Fund Holders: 43
Pioneer Natural Resources Company (NYSE:PXD) stands at the 9th spot in our list of best energy stocks for 2022. Pioneer Natural Resources Company (NYSE:PXD) specializes in the exploration of hydrocarbons. The organization was founded in 1997 with its headquarters in Irving, Texas.
On April 7, Piper Sandler analyst Mark Lear raised the price target to $322 from $274 and maintained an ‘Overweight’ rating on the shares of Pioneer Natural Resources Company (NYSE:PXD). Moreover, Mizuho, a Tokyo-based banking holding company, has lifted their price target on Pioneer Natural Resources Company (NYSE:PXD) to $343 from $266 and kept a ‘Buy’ rating on the shares.
8. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Holders: 50
Next on our list of best energy stocks for 2022 is Enphase Energy, Inc. (NASDAQ:ENPH). Enphase Energy, Inc. (NASDAQ:ENPH) is a California-based energy technology company. The organization manufactures and designs software-driven smart energy solutions.
Analysts have given positive ratings to Enphase Energy, Inc. (NASDAQ:ENPH) for the first quarter of 2022. Considering the attractive growth prospects for Enphase Energy, Inc. (NASDAQ:ENPH) in the solar energy domain, on April 7, KeyBanc analyst Sophie Karp raised the price target on Enphase Energy, Inc. (NASDAQ:ENPH) to $220 from $200 and maintained an ‘Overweight’ rating on its shares. Moreover, on April 13, Stephens, a distinguished financial services firm headquartered in Arkansas, initiated the coverage of Enphase Energy, Inc. (NASDAQ:ENPH) and gave it an ‘Overweight’ rating with a $280 price target.
7. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 50
Chesapeake Energy Corporation (NASDAQ:CHK) occupies the 7th slot in our list of best energy stocks for 2022. Chesapeake Energy Corporation (NASDAQ:CHK) is an exploration and production company that is specialized in the acquisition and exploration of oil and natural gas from underground reservoirs. The company was founded on May 18, 1989, and is headquartered in Oklahoma.
Chesapeake Energy Corporation (NASDAQ:CHK) surprised analysts in the fourth quarter of 2021 when its actual revenue jumped to $1.79 billion after beating the estimated target by $705.52 million.
Many analysts have raised the price target on Chesapeake Energy Corporation (NASDAQ:CHK) during the first quarter of this year. Recently, RBC Capital analyst, Scott Hanold raised the firm’s price target on Chesapeake Energy Corporation (NASDAQ:CHK) to $98 from $88 and maintained an Outperform rating on its shares. Hanold further added that he expected a total dividend yield of around 10% in 2022. Similarly, Wolfe Research analyst Josh Silverstein raised the price target on Chesapeake Energy Corporation (NASDAQ:CHK) to $111 from $104 and maintained an ‘Outperform’ rating on its shares.
The hedge fund sentiment for Chesapeake Energy Corporation (NASDAQ:CHK) is bullish. According to the data from Insider Monkey, 50 hedge funds held stakes worth $2.33 billion in Chesapeake Energy Corporation (NASDAQ:CHK) at the end of the fourth quarter of 2021.
6. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) lies at the 6th position in our list of best energy stocks for 2022. Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based energy company. The core business of the company is the exploration, development, and production of oil and natural gas in the United States.
Devon Energy Corporation (NYSE:DVN) surprised Wall Street with its earnings in all four quarters of 2021. In Q4 2021, the actual EPS of the organization stood at $1.39 which beat its estimated value by $0.15. Similarly, during the same quarter, the actual revenue was recorded as $4.27 billion which beat the estimated revenue by $1.04 billion. During the last two years, Devon Energy Corporation (NYSE:DVN) beat its estimated EPS in 7 out of 8 quarters. According to Insider Monkey’s database, 51 hedge funds held stakes worth roughly $1.74 billion in the company at the end of Q4 2021.
Devon Energy Corporation (NYSE:DVN) has received several positive ratings from analysts. On April 17, Truist analyst Neal Dingmann increased the price target on Devon Energy Corporation (NYSE:DVN) to $91 from $80. Moreover, on May 9, Raymond James analyst John Freeman raised the price target on Devon Energy Corporation (NYSE:DVN) to $90 from $85 besides maintaining a ‘Strong Buy’ rating on its shares. Similarly, the organizations like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP), and Devon Energy Corporation(NYSE:DVN) in the oil and gas sector and NextEra Energy, Inc. (NYSE:NEE) in the renewable energy sector have got positive ratings from analysts.
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Disclosure: none. 12 Best Energy Stocks for 2022 is originally published on Insider Monkey.
