Chesapeake Energy Corporation (CHK), WPX Energy Inc (WPX), InterOil Corporation (USA) (IOC): Three Energy Stocks to Light a Fire Under Your Portfolio

InterOil
Both Chesapeake Energy Corporation (NYSE:CHK) and WPX Energy Inc (NYSE:WPX) are primarily upstream companies; they get the oil and natural gas out of the ground and sell it. InterOil engages in the oil exploration and extraction business as well, but it also expands into the midstream (refined oil and natural gas liquefaction) and downstream (retail distribution of refined products) processes. The added diversification that InterOil Corporation (USA) (NYSE:IOC)’s many business operations give it may make the company a good play in a market with highly fluctuating commodity prices.

IOC Revenue Quarterly YoY Growth data by YCharts.

InterOil Corporation (USA) (NYSE:IOC) has been enjoying solid revenue growth. Being able to not only explore and draw the resources from the ground but also to refine and sell them is a significant advantage. The company has seen year-over-year revenue growth in six of the past seven quarters, with the single outlying quarter marking just a 1% revenue contraction. It helps that InterOil Corporation (USA) (NYSE:IOC) has increased its refinery operating capacity for three consecutive years and has been able to expand sales of refined products, largely because of growth in aviation sales and retail businesses.

Fill ‘er up
Energy stocks can be a great way to diversify portfolios and gain exposure to commodities, since their performance is highly correlated. It’s worth noting that the correlation can also make companies in the industry highly volatile, as we’ve seen in the recent past. But if you tread carefully here, you could light a fire under your portfolio, as all three of these stocks have solid earnings and high potential for future growth.

The article 3 Energy Stocks to Light a Fire Under Your Portfolio originally appeared on Fool.com and is written by John Del, Vecchio.

Fool contributor John Del Vecchio is the manager of the Forensic Accounting ETF and is the co-author with The Motley Fool’s Tom Jacobs of What’s Behind the Numbers? How to Expose Financial Chicanery and Avoid Huge Losses in Your Portfolio.  He owns no positions in the stocks mentioned in this article. The Motley Fool has options on Chesapeake Energy.

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