In this article, we will be taking a look at the 5 best gas stocks to buy now. To read our detailed analysis of these stocks, you can go directly to see the 10 Best Gas Stocks To Buy Now.
5. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 46
EQT Corporation (NYSE:EQT) boasts itself as being the largest natural gas producer in the US, having total sales volume of 527 Bcfe in the fourth quarter, leading to a full-year sales volume of 1,858 Bcfe. For full-year 2022, EQT Corporation (NYSE:EQT) posted a sales volume guideline of 1,950 to 2,050 Bcfe.
The Pennsylvania-based independent natural gas company profited from surging gas prices between October and December 2021. The company reported net income of $1.8 billion or $4.69 per share for the final quarter of 2021. EQT Corporation (NYSE:EQT) also reported free cash flow of $935 million for fiscal year 2021, an increase of $610 million from the previous year.
As of March 16, EQT Corporation (NYSE:EQT) shares have climbed 21% in the past three months. Given the company’s market share in the natural gas sector, hedge funds and market analysts consider EQT to be one of the best gas investment options. D E Shaw, a New York-based hedge fund, increased its holdings in EQT Corporation (NYSE:EQT) by 89% in the fourth quarter of 2021, to 6.6 million shares. The hedge fund has a $145 million interest in the natural gas company, making it one of the company’s largest stockholders.
4. Chesapeake Energy Corporation (NYSE:CHK)
Number of Hedge Fund Holders: 50
Chesapeake Energy Corporation (NYSE:CHK) is another independent energy firm that explores oil and natural gas assets in the U.S. The number of hedge funds tracked by Insider Monkey with stakes in Chesapeake Energy Corporation (NYSE:CHK) increased to 50 in Q4 2021, up from 44 in Q3 2021. Their positions were worth $2.34 billion as of the end of the fourth quarter.
The Oklahoma-based natural gas producer is among the many energy companies that benefited from the strong gas price rally last year. The stock has delivered 70% returns to investors in the previous year, as of March 16. Moreover, Chesapeake Energy Corporation (NYSE:CHK) generated more than $1.2 billion in adjusted free cash flow last year and expects to produce $1.9 to $2.1 billion in adjusted free cash flow in 2022. On March 8, RBC Capital analyst Scott Hanold kept his ‘Outperform’ rating on Chesapeake Energy Corporation (NYSE:CHK) and increased his price target for the stock to $98 from $88.
Chesapeake Energy Corporation (NYSE:CHK) would be a good fit for income investors looking to diversify their portfolios with an energy asset. The company recently announced a total dividend payout of $5 billion over the next five years. Currently, the Oklahoma-based energy firm pays its shareholders an annual dividend of $2.89 per share.
3. Cheniere Energy, Inc. (NYSE:LNG)
Number of Hedge Fund Holders: 52
Cheniere Energy, Inc. (NYSE:LNG) operates LNG facilities in the U.S, including Sabine Pass, the country’s largest LNG facility. In the midst of the Russian-Ukraine conflict, President Joe Biden recently approved more LNG exports to Europe, and Cheniere Energy, Inc. (NYSE:LNG) is set to export the equivalent of 0.72 billion cubic feet per day (bcfpd) of the supercooled fuel from its Sabine Pass.
During the fourth quarter, Cheniere Energy, Inc. (NYSE:LNG) closed a long-term sale and purchase agreement with Sinochem Group Co., Ltd. Beginning in July 2022, Cheniere Energy, Inc. (NYSE:LNG) will supply the Beijing-based energy company with LNG for the next 17.5 years.
Marc Solecitto, a Barclays analyst, underlined his optimism for the Houston-based LNG producer recently. Solecitto raised his price target for Cheniere Energy, Inc. (NYSE:LNG) to $160 from $131 on March 14, noting the company’s “strong” liquefied natural gas macro backdrop, growth forecast, and capital allocation. The analyst kept an’ Overweight’ rating on the stock. In contrast, of the 924 elite funds tracked by Insider Monkey that filed 13Fs for the Q4 period, 52 held a position in Cheniere Energy, Inc. (NYSE:LNG) in Q4 2021, up from 49 the previous quarter.
Here is what ClearBridge Investments had to say about Cheniere Energy, Inc. in its Q3 2021 investor letter:
“Cheniere Energy is an energy infrastructure company that owns and operates U.S. liquefied natural gas (LNG) export facilities. Strong quarterly results and the disclosure of capital allocation policies were positively received by the markets. In addition, continued supply and demand tightness in the LNG market created a favorable commodity price environment.”
2. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
In January, Chevron Corporation (NYSE:CVX), one of the world’s largest integrated energy companies, reported its fourth consecutive quarterly profit as oil and natural gas prices recovered from their pandemic slump. The California-based oil and gas company delivered net income of $5.1 billion or diluted EPS of $2.63. As one of the biggest gas suppliers in the world, Chevron Corporation (NYSE:CVX) increased its global net natural gas production in 2021 to 7,709 MMcf/d from 7,290 MMcf/d in 2020.
Chevron Corporation (NYSE:CVX) generated $21.1 billion in free cash flow last year, up from $1.1 billion the year before, allowing the oil and gas giant to return $11.6 billion to shareholders in the form of dividends and share repurchases. Chevron Corporation (NYSE:CVX) is one of the most well-known dividend aristocrats, having increased its dividend payout for the past 35 years. Currently, the oil company pays its shareholders an annual dividend of $5.68 per share.
At the end of the fourth quarter of 2021, 53 funds held a total stake of $6.51 billion in Chevron Corporation (NYSE:CVX), up from 51 funds a quarter earlier.
Here is what Goehring & Rozencwajg Associates had to say about Chevron Corporation in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publically expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Exxon Mobil Corporation (NYSE:XOM) is one of the best gas stocks to buy now according to market analysts. The American oil behemoth profited greatly from the rally of oil and gas prices, increasing its revenue by more than 80% year-on-year to $84.9 billion in the final quarter of 2021. On March 9, Barclays analyst Jeanine Wai raised her price target on Exxon Mobil Corporation (NYSE:XOM) to $98 from $91, while maintaining an ‘Overweight’ rating on the shares.
The Texas-based integrated energy company also increased its natural gas production available for sale globally in Q4 2021 to 8,584 mcfd, up from 8,185 mcfd in Q4 2020. Exxon Mobil Corporation (NYSE:XOM), the world’s second-largest oil and gas company, recently announced a $291.5 million budget for expanding its Australian gas unit in the Gippsland Basin Kipper field. Exxon Mobil Corporation’s (NYSE:XOM) Australian subsidiary, Esso Australia, intends to deliver an additional 200 petajoules of gas between 2023 and 2027, as policymakers in the country warn of a potential gas shortage in eastern Australia.
As Exxon Mobil Corporation (NYSE:XOM) continues to cash in on the rising commodity prices, hedge funds became more bullish about the gas stock. Florida-based asset management firm GQG Partners increased its stake in the Texas-based oil company by 22% in Q4 2021, bringing its total holdings to over 32 million shares worth $1.98 billion. Overall, 71 of the funds tracked by Insider Monkey reported owning stakes in Exxon Mobil Corporation (NYSE:XOM) as of the end of December 2021.
Here is what Saturna Capital Amana Funds had to say about Exxon Mobil Corporation (NYSE:XOM) in its Q4 2021 investor letter:
“Few companies maintain their position at the top for more than a decade or two. One that did was Exxon, which appeared decennially from 1980 through 2010. In 2019 it was ranked 10th, but as of writing has dropped to 39th place.”
You can also take a peek at the 10 Recession-Proof Stocks to Buy and Hold and 10 Cheap Stocks Hedge Funds Are Talking About.
