In this piece we will take a look at the five best energy stocks to buy. For more stocks and our industry introduction, head on over to 10 Best Energy Stocks to Buy Now.
5. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 39
Shell plc (NYSE:SHEL) is an energy and oil company that operates all over the globe, covering regions worldwide. The company produces natural gas, crude oil, liquefied natural gas (LNG), and other energy products. Additionally, the firm also produces electricity from renewable sources such as wind and solar.
Shell plc (NYSE:SHEL) is also one of the largest oil companies in the world as it produces 3.5 million barrels of oil per day and has an equally impressive portfolio of 46,000 gas stations. It also used the recent oil price increases to decrease its debt by 45%. The analyst consensus estimates for EPS for the next three years of $10.36, $9.06, and $7.52, combined with a 9% cost of capital, and a 0% terminal growth rate peg Shell plc (NYSE:SHEL)’s fair value share price at $70.22 – for a significant upside over its current share price of $54.88.
Shell plc (NYSE:SHEL)’s largest investor is Ken Fisher’s Fisher Asset Management which owns 20 million shares that are worth $1 billion.
4. Marathon Oil Corporation (NYSE:MRO)
Number of Hedge Fund Holders: 41
Marathon Oil Corporation (NYSE:MRO) is an oil exploration and production company that explores and sells crude oil, natural gas, and derivates such as methanol and LNG. The firm is headquartered in Houston, Texas, United States of America.
Marathon Oil Corporation (NYSE:MRO) is relatively safe when compared to some of the other firms out there when we take a look at its FCO Cockpit Global Bubble Status Report score of 17.1% which implies that the stock is not in a bubble that might pop and bring down investors with it. Additionally, the FCO’s return on invested capital (ROIC) to enterprise value score for Marathon Oil Corporation (NYSE:MRO) is 78%, hinting that perhaps the stock is undervalued. The company’s second quarter results saw it post an FCF yield of 25%, which was the second highest in the S&P 500. Marathon Oil Corporation (NYSE:MRO) also pays an 8 cent dividend for a 1.22% yield.
Piper Sandler raised Marathon Oil Corporation (NYSE:MRO)’s share price target to $41 from $38 in July 2022, indicating that the energy sector has responded well to recessionary fears. 41 out of the 895 hedge funds polled by Insider Monkey for their June quarter of 2022 holdings had held a stake in the company.
Ken Fisher’s Fisher Asset Management‘s is Marathon Oil Corporation (NYSE:MRO)’s largest investor. It owns 8.6 million shares that are worth $194 million.
Carillon Tower Advisers mentioned the company in its Q1 2022 investor letter. Here is what the fund said:
“Stock selection contributed the most while sector allocation was also positive. An underweight to communication services and an overweight to energy helped performance, while an underweight to consumer staples and an overweight to materials detracted. Stock selection was strong within healthcare and materials but was weak within information technology and industrials. Marathon Oil (NYSE:MRO) increased its quarterly dividend and executed an impressive share buyback that blew by the target it originally announced.”
3. Marathon Petroleum Corporation (NYSE:MPC)
Number of Hedge Fund Holders: 50
Marathon Petroleum Corporation (NYSE:MPC) is an oil refiner, transporter, and marketer that is headquartered in Findlay, Ohio, United States. It is one of the oldest companies in the world as it was set up in 1887. The firm’s refined products include gasoline, heavy fuel, and asphalt.
Marathon Petroleum Corporation (NYSE:MPC) is America’s largest oil refiner and its latest quarter saw it bring in an outstanding $4.36 billion in cash from operations. The company also expects an operating income of $19.6 billion this year, which is higher than the sum of the operating incomes for 2016 to 2018. Additionally, next year the firm is expected to generate $7.6 billion in free cash flows for a strong 17% yield over its current market value. Marathon Petroleum Corporation (NYSE:MPC) also pays a 58 cent dividend for a 2.22% yield.
Barclays raised Marathon Petroleum Corporation (NYSE:MPC)’s share price target to $112 from $94 in August 2022, sharing that U.S. refinery fundamentals will continue to do well unless there is an economic shock. Insider Monkey studied 895 hedge fund holdings for this year’s second quarter to discover that 50 had bought the company’s shares.
Marathon Petroleum Corporation (NYSE:MPC)’s largest investor is Paul Singer’s Elliott Management which owns 11 million shares that are worth $909 million.
2. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 71
ConocoPhillips (NYSE:COP) is a global explorer, producer, transporter, and seller of crude oil, natural gas, LNG, and bitumen. The firm has assets in North America, Europe, Australia, and Asia. It is headquartered in Houston, Texas, United States.
ConocoPhillips (NYSE:COP) scored a big win during its second quarter when it managed to acquire a stake in QatarEnergy’s LNG business. QatarEnergy is one of the world’s largest LNG producers, and the demand for this fuel is expected to rise in the coming months due to European requirements for power and heat during the winter. Roughly 37% of ConocoPhillips (NYSE:COP)’s 6.1 billion barrels of oil equivalent (boe) reserves are priced at Brent crude oil prices, indicating that there is a potential huge inflow of cash waiting for it in the future. Finally, the firm also pays out a $1.11 dividend for a 3.96% yield.
MKM Partners increased ConocoPhillips (NYSE:COP)’s share price target to $118 from $110 in August 2022, as it shared that high natural gas prices and robust LNG demand will bode well for the company. Insider Monkey’s 895 Q2 2022 hedge fund survey saw 71 investors in the company.
Out of these, Ken Fisher’s Fisher Asset Management is ConocoPhillips (NYSE:COP)’s largest shareholder. It owns 6.7 million shares that are worth $607 million.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 72
Exxon Mobil Corporation (NYSE:XOM) is one of the largest and oldest oil companies in the firm. The firm was founded in 1870 and it is headquartered in Irving, Texas, United States. It is engaged in the business of crude oil, natural gas, and other fuels.
Exxon Mobil Corporation (NYSE:XOM) is one of the companies that is slated to heavily benefit from sanctions against Russian oil in the aftermath of the Ukraine war. Exxon Mobil Corporation (NYSE:XOM) has some of the largest oil refineries in Europe, with its refinery in Antwerp being capable of refining 333,000 barrels of oil daily. This will allow it to move in to scoop up the roughly 1.2 million barrels of demand that will be left if Russia is unable to export to Europe. Additionally, the company is heavily investing in LNG, which is another viable sector that will be opened up to it as the Russian LNG market is expected to witness no growth this year in light of fresh sanctions. Finally, Exxon Mobil Corporation (NYSE:XOM) also pays out an 88 cent dividend for a 3.6% yield.
Credit Suisse set a $125 share price target for Exxon Mobil Corporation (NYSE:XOM) in August 2022 and set an Outperform rating for the shares. 72 of the 895 hedge funds surveyed by Insider Monkey for their second quarter of 2022 investment portfolios had held a stake in the company.
Exxon Mobil Corporation (NYSE:XOM)’s largest investor in our database is Rajiv Jain’s GQG Partners which owns 47 million shares that are worth $4 billion.
Disclosure: None. You can also take a look at 15 Best Security Stocks to Buy Now and 20 Most Expensive Stocks in the US.
