Is EQT Corporation (EQT) the Best Natural Gas Stock to Buy Now?

We recently published a list of 11 Best Natural Gas Stocks To Buy Now. In this article, we are going to take a look at where EQT Corporation (NYSE:EQT) stands against other 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.

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).

Is EQT Corporation (EQT) The Best Natural Gas Stock To Buy Now?

A storage facility for natural gas, showing the vast reserves of this abundant energy source.

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.

Overall, EQT ranks 7th on our list of best natural gas stocks to buy now. While we acknowledge the potential for EQT 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 EQT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

Disclosure: None. This article is originally published at Insider Monkey.