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 Exxon Mobil Corporation (NYSE:XOM) 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 Exxon Mobil Corporation (XOM) The Best Natural Gas Stock To Buy Now?](https://imonkey-blog.imgix.net/blog/wp-content/uploads/2023/09/20131210/XOM-insidermonkey-1695229927003.jpg?auto=fortmat&fit=clip&expires=1771545600&width=480&height=269)
Aerial view of a major oil rig in the middle of the sea, pumping crude oil.
Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Topping our list of the Best Natural Gas Stocks to Invest in is Exxon Mobil Corporation (NYSE:XOM), one of the largest integrated fuels, lubricants, and chemical companies in the world with operations in more than 60 countries.
Exxon Mobil Corporation (NYSE:XOM) announced the acquisition of Pioneer Natural Resources in a massive $59.5 billion all-stock deal last year. The venture seems to be paying off as the oil major achieved record production in Permian and Guyana and delivered an industry-leading financial performance in 2024, reporting over $33 billion in earnings and $55 billion in cash flow from operations. Exxon’s strong balance sheet allowed it to pay $16.7 billion in dividends and buy back $19.3 billion in stock, reaffirming its plans to spend $20 billion on buybacks per year through at least 2026.
Exxon Mobil Corporation (NYSE:XOM) announced in December 2024 that its annual project spending will rise to between $28 billion and $33 billion between 2026 and 2030, with a goal of increasing its oil and gas output by 18%. The company has a target of more than tripling its production in the Permian and producing 1.3 million bpd from its highly lucrative operations in Guyana. As a result, XOM is expecting to deliver incremental growth potential of $20 billion in earnings and $30 billion in cash flow by the end of the decade, allowing it to keep its commitment to sustainable, competitive, and growing shareholder returns.
Antero Resources Corporation (NYSE:AR) has surged by over 80% over the last year, putting it among the 12 Hot Oil Stocks to Buy According to Hedge Funds.
Overall, XOM ranks 1st on our list of best natural gas stocks to buy now. While we acknowledge the potential for XOM 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 XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.