In this piece, we will look at what happened to LNG stocks and 10 best LNG stocks to buy now.
Liquefied natural gas is one of the fastest-growing sectors in the energy industry. The global LNG market is changing quickly to meet the rising demand for gas in new markets. This growth is fueled by more companies getting involved and faster advancements in technology, but faces uncertainties due to supply constraints.
The 2024 World LNG Report reveals that the global LNG market now connects 20 exporting with 51 importing markets, with supply being the main constraint on growth. After two turbulent years, the market has reached a fragile equilibrium due to limited spare supply.
Geopolitical tensions have significantly shifted demand and supply dynamics, fueling price volatility and causing natural gas prices to rise across all key markets in the second quarter of 2024. These factors continue to pose challenges for the industry in 2024.
However as the industrial coal-to-gas transition gathers steam fueled by solid demand in China and Southeast Asia, demand for LNG is expected to grow by 40% by 2040.
The worldwide market for liquefied natural gas is expected to experience steady expansion until 2030 as production increases, resulting in reduced costs and a broader market reach in nations where coal is more affordable.
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The total LNG supply globally is anticipated to rise by an average of 31 million metric tons annually until 2030. Production capacity is expected to grow by 30% or more from 2026 to 2028 due to the launch of new liquefaction facilities. LNG Capacity should exceed 600 million by 2030.
The increased supply comes as companies invest billions of dollars in building LNG facilities in the hope of cashing in on the exponential growth in demand. Amid the rise in LNG demand, investment opportunities are increasingly cropping up for investors looking to diversify their energy sector portfolios.
Over the last 50 years, LNG trade has grown at an average rate of 11% annually, starting from 2.6 million metric tons in 1971 and reaching 372.3 million metric tons in 2021. Given that the expansion has been consistently positive, it underscores the tremendous opportunity for grabs amid the transition from coal.
According to Julia Khandoshko, CEO of international broker Mind Money, the main trend in the LNG market is the transition to natural gas as LNG infrastructure expands, making it a preferred energy source.
The growing investments in the sector in the US and Europe affirm the sector’s long-term prospects. While US LNG exports have increased significantly since Russia invaded Ukraine, affecting key supply lines, there is still room for growth.
Japan dominates the $250 billion global LNG trade, giving it its primary role in the supply chain stage. Additionally, Japanese companies netted at least $14 billion in profit from gas-related business, affirming the booming business. Nevertheless, some of the best LNG stocks are in the U.S.
The shale oil and gas production surge has allowed the U.S. to secure the top spot in global natural gas output, contributing to stable prices at home. However, the country doesn’t require all this gas for its own use, making producers keen to sell it abroad to regions like Europe and Asia, where it fetches a premium. The U.S. Energy Information Administration anticipates a 2% increase in U.S. LNG exports this year and a further 18% rise next year as new export plants are established.
While energy stocks can be highly volatile, LNG stocks have proven more resilient than crude oil and other entry commodities. As natural gas moves to replace coal as the primary energy source amid the push to combat emissions, some of the best LNG stocks to buy now are poised to offer some of the best investment opportunities. Such stocks are of companies capable of delving low, modest LNG production growth at the lowest breakeven levels.
Companies investing billions into exploring more natural gas resources to meet the growing demand are some of the best investment plays in the sector. Additionally, companies are building LNG export and import infrastructure to benefit from the supply chain business.
Investments in building LNG infrastructure are expected to generate significant free cash flow going to the strong demand, consequently allowing the companies to pay big dividends.
Source: pexels
Our Methodology
For our list of the best LNG stocks to buy now, we sifted through ETFs and online rankings to compile an initial list of 20 stocks. We then selected the 10 stocks that are the most popular among elite hedge funds. We have sorted the list in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
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).
Best LNG Stocks to Buy Now
10. Eni S.p.A. (NYSE:E)
Number of Hedge Fund Holders: 11
Eni S.p.A. (NYSE:E) is an integrated energy company that explores and develops oil and gas properties. It also supplies and sells wholesale natural gas through pipelines, international transport, and purchase.
It stands out as one of the best LNG stocks to buy now owing to its strong production growth and continued upgrading of its portfolio.
The company also boasts strong cash generation and strict capital discipline, allowing it to return optimum value to shareholders. Eni S.p.A. (NYSE:E) is significantly involved in the LNG sector, with notable projects like the Coral Floating LNG in Congo and increased contributions from Libya. In Q2 2024, their Global Gas & LNG Portfolio segment achieved a pro forma adjusted EBIT of €334 million despite a challenging market environment.
Eni S.p.A. (NYSE:E) achieved a net profit of €1.5 billion in the second quarter, attributed to oil and gas production rising 6% and benefiting from higher prices in the market. The company also achieved an adjusted cash flow before working capital of €3.9 bbl, signaling the solid underlying performance supported by our operational execution, growth, valuable assets, and financial discipline.
Analysts at Morgan Stanley have emphasized Eni S.p.A. (NYSE:E)’s present Cash flow from operations multiple of 3.4x and noted that while the firm’s projected Free Cash Flow (FCF) yield for 2025 is 11.1%, which matches the industry norm, a considerable part of its CFFO is dedicated to spending on capital projects. This approach to investing, the expert explained, affects Eni’s forecast for its Free Cash Flow.
Early in the year, Eni S.p.A. (NYSE:E) announced plans to return $1.7 billion to shareholders through buybacks while announcing plans to raise the package to $3.8 billion. The company also raised its annual dividend by 6% to $1.08 per share.
Currently, the stock rewards investors with a 6.66% dividend yield, affirming its commitment to returning value to shareholders. Additionally, it is one of the best LNG stocks to buy now as it is trading at a discount with a price-to-earnings multiple of 6 compared to the industry average of 12.
Out of the 912 hedge funds holdings surveyed by Insider Monkey for their June quarter of 2024 investments, 11 were Eni S.p.A. (NYSE:E) ‘s shareholders. Paul Marshall and Ian Wace’s Marshall Wace LLP owns the most significant stake, worth $6.88 million.
9. Woodside Energy (NYSE:WDS)
Number of Hedge Fund Holders: 12
Woodside Energy (NYSE:WDS) is an energy company that explores, evaluates, and develops hydrocarbons. It produces liquefied natural gas, pipeline gas, and crude oil. It is one of the companies that has benefited from elevated gas prices over the past three years and has seen its free cash flow grow, therefore rewarding investors with dividends.
Woodside Energy (NYSE:WDS) has been strengthening its LNG footprint by acquiring OCI’s clean ammonia project and Tellurian. The acquisition aligns with the market shift towards greener fuel options and is expected to boost its position in the LNG sector. The company has also secured long-term LNG supply agreements with Korea Gas Corporation and CPC Corporation in Taiwan, emphasizing the critical role of LNG in ensuring regional energy security.
The leading natural gas producer delivered solid first half of the year’s results, which were characterized by $1.9 billion in net profit after tax as unit production costs dropped 6% and free cash flow rose to $740 million. The solid results were fuelled by strong demand for LNG and its role in the energy transition from coal.
Woodside Energy (NYSE:WDS) has shown strong financial and operational results in the first six months of 2024. The firm continues to concentrate on executing its plan, controlling expenses efficiently, and seeking expansion chances while upholding its dedication to environmental responsibility and providing returns to its investors.
Woodside Energy (NYSE:WDS) distributes substantial dividends to its investors, currently boasting a dividend yield of 7.15%. The company also has a history of consistently paying dividends for an impressive 33 years.
While the stock trades at a price-to-earnings multiple of 18, its shares are priced in an attractive way for value investors eyeing exposure in the LNG sector. Moreover, the stock usually shows minimal fluctuations in price, making it attractive to investors looking for a stable investment option in their portfolio.
In the second quarter, Woodside Energy (NYSE:WDS) stock was held by 12 hedge funds with stakes worth $99.19 million.
8. Equinor ASA (NYSE:EQNR)
Number of Hedge Fund Holders: 14
Headquartered in Stavanger, Norway, Equinor ASA (NYSE:EQNR) is an energy company engaged in oil and gas exploration, production, and transportation. It develops carbon capture and storage projects while providing transportation solutions, including pipelines, shipping, trucking, and rail.
Equinor ASA (NYSE:EQNR) is also actively involved in the liquefied natural gas (LNG) sector, operating the Hammerfest LNG plant in Norway, which produces LNG for global markets. The company has signed long-term agreements, such as a 15-year deal with Deepak Fertilizers in India, starting in 2026. Additionally, Equinor has extended its long-term contract with Finnish energy company Gasum for LNG bunkering, ensuring continued supply to Equinor’s dual-fuel chartered fleet. This agreement highlights both companies’ commitment to reducing emissions in the maritime sector.
While the stock has pulled down significantly, its underperformance has nothing to do with the weakness of the core business. The pullback comes from the broader energy sector, which is under pressure, resulting in weak oil and gas prices.
Nevertheless, despite the weakness in the energy sector, European energy prices have remained significantly high due to the impact of the Russian-Ukraine war. Consequently, Equinor remains well-positioned to continue generating shareholder value owing to its robust revenue streams.
Equinor ASA (NYSE:EQNR) delivered robust second-quarter results, which were attributed to robust LNG gas production and higher liquids prices across major segments. Nevertheless, the company could have generated more revenues and earnings had it not been subjected to lower gas prices.
Revenues in the quarter rose to $25.5 billion from $22.87 billion delivered a year ago. Earnings per share also rose to 84 cents, a share-bearing cost census estimate, and sofa 81 ends per share.
Equinor ASA (NYSE:EQNR) stands out as one of the best LNG stocks to buy owing to its over $37 billion cash and cash equivalent. Consequently, the company is well-positioned to return value to shareholders through dividends. It currently rewards investors with a 5.28% dividend yield. The company plans to return close to $14 billion to shareholders in 2024.
Additionally, Equinor trades at a discount with a price-to-earnings multiple of 7, which affirms a potential undervaluation compared to its industry peers.
At the end of Q2 2024, 14 hedge funds tracked by Insider Monkey reported having stakes in Equinor ASA (NYSE:EQNR), down from 17 in the previous quarter. The overall value of these stakes is over $158.58 million. Among these hedge funds, Balyasny Asset Management was the company’s leading stakeholder in Q2.
7. TotalEnergies SE (NYSE:TTE)
Number of Hedge Fund Holders: 18
TotalEnergies SE (NYSE:TTE), a conglomerate in the energy sector, is involved in producing and distributing oil, biofuels, and natural gas. The Integrated LNG division covers the entire natural gas supply chain, including the exploration and production of liquefied natural gas (LNG) and biogas, hydrogen, and gas trading activities.
Early in the year, the company signed a 16-year sale and purchase agreement to supply up to 0.8 million tons of LNG in Singapore starting in 2023. This contract highlights TotalEnergies SE (NYSE:TTE)’s dedication to backing Singapore’s energy safety and green initiatives while boosting its status as a leading international LNG supplier.
TotalEnergies SE (NYSE:TTE) is committed to becoming a company that does not release any carbon emissions into the atmosphere by the year 2050 and has already begun the necessary actions to reach this goal. It intends to increase its use of renewable energy sources. The company anticipates spending between $17 and $18 billion in the year 2024, with $5 billion allocated specifically to the Integrated Power sector.
The leadership team also focuses on growing the company’s LNG (Liquefied Natural Gas) business worldwide. In 2023, the company solidified its presence in Europe by launching two floating regasification terminals. Moreover, extending the agreements with Oman LNG for another 10 years and with Dalhart LNG for 5 years will enhance the company’s global LNG business.
The company delivered solid financial results for its fiscal 2023 amid an uncertain environment as adjusted net income rose to $23.2 billion and cash flow reached $35.9 billion. It also increased its dividend payments by 7.1% and completed 4$9 billion in buybacks.
TotalEnergies SE (NYSE:TTE) is one of the most financially stable LNG Companies, and it has a trailing 12-month cash flow from operations of $40.68 billion, which is notably greater than the sector’s average of $679.52 million. Likewise, its trailing 12-month cash flow per share is $11.59, which is notably greater than the sector’s average of $1.01.
Similarly, the company returns value to shareholders through dividends. It distributes a yearly dividend of $3.20 per share, equating to a dividend yield of 5.12% based on its current share value. Over the last four years, its average dividend yield has been 6.60%. Over the last five years, TotalEnergies SE (NYSE:TTE) ‘s dividend payments have increased at a 2% compound annual growth rate.
Insider Monkey reports that the number of hedge funds with stakes in the company remained steady at 18 in Q2 2024, unchanged from the previous quarter.
Here is what Aristotle Capital Management, LLC, an investment management company, said about TotalEnergies SE (NYSE:TTE) in its first quarter 2024 investor letter:
“During the quarter, we sold our positions in Phillips 66 and Sysco and invested in two new positions: Lowe’s Companies and TotalEnergies SE (NYSE:TTE).
Headquartered in Paris, France, TotalEnergies was founded in 1924 and is one of the world’s largest energy companies. The company operates in more than 130 countries and spans the entire energy value chain, producing and marketing oil and biofuels, liquid natural gas (LNG), renewables and electricity.
To meet the challenge of the energy transition and still ensure reliable energy in the short term, TotalEnergies has implemented a two-pillar strategy: on one end, the company continues to develop low-cost exploration and production projects, with LNG playing a vital role in the transition; on the other, it has been building its Integrated Power segment through investments in renewable power. As such, management plans to invest over 30% of total spending in low-carbon businesses and rank among the world’s top five providers of solar and wind energy by 2030. To emphasize this ambition, the company changed its name from Total to TotalEnergies in 2021…” (Click here to read the full text)
6. Kinder Morgan, Inc. (NYSE:KMI)
Number of Hedge Fund Holders: 41
Kinder Morgan, Inc. (NYSE:KMI) is one of the best LNG stocks to buy now, as the company operates as an energy Infrastructure Company in North America. It manages significant natural gas pipelines, storage facilities, collection networks, and processing and purification plants.
Kinder Morgan, Inc. (NYSE:KMI) ‘s primary business is natural gas infrastructure, consistently producing stable free cash flow. 94% of its earnings come from fixed-price contracts, other revenue-based agreements, or financial hedges, enabling it to make $3.3 billion in cash flow without debt.
In recent years, acquisitions have played a significant role in its expansion. Kinder Morgan, Inc. (NYSE:KMI) completed two major deals with Stagecoach Gas Services, a company with a pipeline and storage network in the Northeast, for $1.22 billion. Additionally, it acquired Interrex Energy, a company that produces renewable natural gas, for $310 million. In 2022, it bought North American Natural Resources, a company specializing in renewable natural gas facilities, for $135 million.
Additionally, it operates the largest natural gas transmission network, moving 40% of LNG. Kinder Morgan, Inc. (NYSE:KMI) is a significant player in the LNG sector. The company operates the Elba Island Liquefaction facility, which has a total capacity of approximately 2.5 million tonnes per year of LNG for export. Additionally, Kinder Morgan acquired Kinetrex Energy, a leading supplier of LNG in the Midwest. These operations highlight Kinder Morgan’s substantial role in the LNG market.
In the second quarter, the company recorded strong operational and financial performance. It continued funding high-quality capital projects that generated $1.7 billion in cash flow and $1.1 billion in free cash flow. Net income attributable to shareholders totaled $575 million.
Kinder Morgan, Inc. (NYSE:KMI) uses its earnings to pay a high dividend, buy back its own shares, and grow its natural gas infrastructure by investing in new projects and acquiring other companies.
Of the 912 hedge funds tracked by Insider Monkey at the end of Q2 2024, 41 hedge funds owned stakes in Kinder Morgan, Inc. (NYSE:KMI), down from 43 in the previous quarter. These stakes are collectively valued at more than $1.31 billion. Among these hedge funds, Castle Hook Partners was the company’s leading stakeholder in Q2.
5. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 49
Shell plc (NYSE:SHEL) is an energy and petrochemical company that explores and extracts crude oil, natural gas, and natural gas liquids. The company also markets and trades natural gas, liquefied natural gas (LNG), crude oil, electricity, and carbon-emission rights.
It is one of the biggest players in the LNG market, having already inked a 19-year LNG gas supply agreement in Turkey. Shell will supply Turkey’s state-owned company with 4 billion cubic meters of LNG annually starting in 2027. The deal is also expected to pave the way for the company to deliver to other European terminals, further strengthening the company’s prospects in the sector
Shell plc (NYSE:SHEL) has enhanced its top LNG collection and achieved significant advancements throughout its Capital Markets, encompassing $1.7 billion in long-term cost cuts since 2022. The company reported strong operational and financial performance for its second quarter thanks to growth in its leading LNG portfolio and high grading downstream.
Its Q2 2024 earnings came in at $6.3 billion, with cash flow from operation totaling $13.5 billion. Free cash flow totaled $10.2 billion for the second quarter and $20 billion for the first six months of the year, leaving the company in a solid position to continue returning value to shareholders through buybacks and dividends.
In the first three months of the year, Shell plc (NYSE:SHEL) signed multiple agreements for liquefied natural gas, highlighting its confidence in the increasing need for this energy source. Additionally, it allocated funds to new ventures in hydrogen and carbon capture technologies.
The company reported saving $700 million in the first half of 2024, bringing its total savings since 2022 to $1.7 billion, aiming to reach a savings goal of $2 billion to $3 billion by 2025.
Shell plc (NYSE:SHEL), boasting a dividend yield of over 3.97% and a robust cash flow situation, stands out as one of the best LNG stocks to buy now. Shell has a history of consistent dividend payments, with distributions made every three months. By March, its payout ratio had dropped to 48%, indicating a strategic shift towards future expansion.
A total of 49 hedge funds out of the 912 tracked by Insider Monkey held stakes in Shell plc (NYSE:SHEL) as of the end of the second quarter. Fisher Asset Management is the largest shareholder in the company and has a stake worth $1.73 billion as of June 30.
4. Chevron Corp (NYSE:CVX)
Number of Hedge Fund Holders: 64
Chevron Corporation (NYSE:CVX) is one of the largest energy companies engaged in integrated energy and chemical operations. Its upstream segment explores and develops oil and natural gas resources, while its downstream unit refines crude oil into petroleum products.
While the cost of oil and natural gas remains the primary factor influencing its financial outcomes, its midstream and downstream operations mitigate the extreme fluctuations characteristic of the energy market.
Although it has explored the realm of clean energy, it has ultimately decided to remain focused on the oil and natural gas industry. However, this doesn’t necessarily make it a poor choice. Indeed, the clean energy sector is expanding. Yet, oil and natural gas are expected to play a significant role for many years ahead.
Chevron’s LNG portfolio includes a 47.3% stake in Australia’s Gorgon LNG (15.6 MTPA), interests in Wheatstone LNG (8.9 MTPA), and Angola LNG (5.2 MTPA). The company is exploring expansion opportunities, including supplying gas to Europe via contracts with Cheniere and Venture Global. Additionally, Chevron is considering using gas from the eastern Mediterranean, acquired through Noble Energy, and evaluating a floating LNG facility to export gas to Europe.
Chevron Corporation (NYSE:CVX) stands out as one of the best LNG stocks to buy now owing to its strong cash flow. During the second quarter of 2024, the firm disclosed an operating cash flow of $6.3 billion, and its free cash flow amounted to $2.3 billion.
As a result of this strong cash flow, the company distributed $6 billion to its shareholders via dividends and stock buybacks. This achievement represented Chevron Corporation (NYSE:CVX) ‘s ninth quarter of delivering more than $5 billion in returns to shareholders.
With a payout ratio of 62%, the company offers a dividend yield of 4.51% while trading at a discount with a price-to-earnings multiple of 10. The firm has raised its yearly payout for an astonishing 37 straight years. This remarkable run is even more impressive when considering the fluctuations in energy costs during that time.
In the second quarter of 2024, Chevron Corporation (NYSE:CVX) appeared in 64 hedge fund portfolios, an increase from 62 in the previous quarter. Warren Buffett’s Berkshire Hathaway remains the largest shareholder, holding stakes valued at $18.55 billion.
3. Cheniere Energy Inc (NYSE:LNG)
Number of Hedge Fund Holders: 65
Cheniere Energy, Inc.(NYSE:LNG), an energy infrastructure company, primarily produces and sells liquefied natural gas. It is a significant exporter of liquefied natural gas (LNG) from the United States as it boasts the ability to produce around 30 million metric tons of LNG annually at its Sabine Pass facility in Louisiana. It is in the process of expanding this operation, with plans to increase its capacity to approximately 20 million metric tons annually.
At the same time, Cheniere Energy, Inc.(NYSE:LNG) also possesses a capacity of about 15 million metric tons per year of LNG at a terminal in Texas. This facility is set to expand, boosting its capacity by more than 10 million metric tons.
The stock is trading close to its all-time highs as investors react to its robust performance in the energy sector. The company has enjoyed robust growth due to its strong market position and ability to capitalize on strong LNG demand.
Cheniere Energy, Inc.(NYSE:LNG)’s competitive edge stems from its long-term and fixed-rate contracts that enable it to generate predictable free cash flow that it can distribute to investors through buybacks and dividends. Its cumulative free cash flow is projected to total $12 billion between 2022 and 2027
The company delivered solid second-quarter results exceeding what was anticipated by the market. The firm declared a combined adjusted EBITDA of $1.3 billion and a net income of $880 million. It has increased its guidance for the entire year of 2024.
Cheniere Energy, Inc.(NYSE:LNG) is projected to see an adjusted EBITDA between $5.5 and $6 billion this fiscal year. Additionally, distributable cash flow is anticipated to range from $2.9 to $3.4 billion. Given the company’s emphasis on long-term liquefaction capacity contracts, the visibility of distributable cash flow is expected to stay strong.
Cheniere Energy is one of the best LNG stocks to buy at attractive valuations as it trades at a forward P/E of 18x and offers a dividend yield of 0.95%. As of Q2 2024, 65 hedge funds held a stake in Cheniere Energy, Inc.(NYSE:LNG)’s.
2. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 72
Houston, Texas, based ConocoPhillips (NYSE:COP) is a leading global energy company specializing in hydrocarbon exploration and production. The company explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas (LNG), and natural gas liquids.
ConocoPhillips (NYSE:COP) stands out as one of the best LNG stocks to buy now owing to its impressive track record in timely acquisitions that strengthen its edge in the energy sector. In 2023, ConocoPhillips expanded its LNG portfolio by securing regasification capacity at the Gate LNG terminal in the Netherlands and finalizing a decision for 5 MTPA of LNG offtake and 30% equity in Sempra’s Port Arthur LNG Phase 1 project.
Additionally, they signed offtake agreements at Mexico Pacific’s Saguaro Energía LNG and Energia Costa Azul export facility. These efforts, along with their 60-year history in LNG technology, position ConocoPhillips as a key player in the global energy transition, leveraging natural gas to reduce greenhouse gas emissions and support energy security.
It also completed the acquisition of Concho Resources when the overall sector was in a downturn, creating a combined resource base of approximately 23 billion barrels of oil equivalent. Nevertheless, the company suffered a major blow on its plan to acquire Marathon Oil, resulting in a significant pullback in the stock price. The acquisition was expected to expand the company’s footprint into new regions, including Eagle Ford, Bakken, Delaware, and Permian basins. It was also expected to result in $500 million in cost savings.
ConocoPhillips (NYSE:COP)’s acquisition strategy focuses on assets that are cost-effective to produce, allowing it to make a profit even when the prices of oil and gas are low. It strategizes its operations around a target price of $60 per barrel.
This structured approach has resulted in the company’s sustained financial stability. It has consistently maintained a financial profile characterized by low long-term debt and strong debt ratios to capital and financial debt to equity. Unlike many other exploration and production companies that took on more debt during the 2020 recession, ConocoPhillips managed to preserve its financial health through its disciplined approach.
ConocoPhillips (NYSE:COP) delivered solid Q2 2024 results with adjusted earnings of $2.3 billion or $1.98 a share. Generated cash provided by operating activities totaled $4.9 billion, and cash from operations (CFO) totaled $5.1 billion.
Backed by a solid balance sheet, the company has consistently rewarded its shareholders, affirming its ability to generate shareholder value. It distributes 40% of its cash flow to shareholders through dividends and buybacks.
ConocoPhillips (NYSE:COP)’s dividend is $0.58 a share with a 1.8% dividend yield. ConocoPhillips has also announced a 34% increase in ordinary dividends as it also plans to return $9 billion of capital by year-end.
By the end of June, 72 hedge funds were bullish on ConocoPhillips (NYSE:COP), up from 62 in the previous quarter, based on Insider Monkey’s database. Eagle Capital Management stood out as the largest stakeholder in the second quarter, with over 14.52 million shares.
Here is what Invesco Distributors, Inc. said about ConocoPhillips (NYSE:COP) in its Q2 2024 investor letter:
“Stock selection in the industrials and health care sectors detracted from relative performance during the quarter. Selection and an underweight in consumer staples also hurt relative return as the sector was one of just two index sectors with a positive return for the quarter. ConocoPhillips (NYSE:COP): The company announced its acquisition of Marathon Oil in May. The deal is expected to increase earnings and will increase the scale of Conoco’s production assets. However, the stock traded lower on the news.”
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 92
Exxon Mobil Corporation (NYSE:XOM) is one of the 4 most diversified energy companies that explores and produces crude oil and natural gas. Its upstream segment explores for and produces crude oil and natural gas, while the Energy Products segment offers fuels, aromatics, catalysts, and licensing services.
ExxonMobil is a global leader in LNG, with interests in projects worldwide, producing 23 million tons annually. Key investments include Gorgon LNG, PNG in Papua New Guinea, and LNG trains in Qatar. The company aims to increase its capacity to 27 MTPA by 2027, with significant projects like the $10 billion Golden Pass LNG in the U.S. and the North Field expansion in Qatar, targeting 40 million tons per year by 2030.
Given its status as a critical player in the oil and gas business, the company presents as a potentially attractive option for investors seeking stability in their portfolio. Its financial strength, backed by a low Price-to-Earnings (P/E) ratio of 12, demonstrates investors’ trust in the firm’s ability to generate profits. Moreover, the firm’s stable price movements underscore its strong market standing, providing investors with a dependable investment choice in the frequently volatile energy industry.
Exxon disclosed Q2 earnings that exceeded expectations and sales figures that surpassed initial projections. Adjusted earnings climbed by 10% compared to the previous year, reaching $2.14 per share, following a sequence of four quarters marked by a decline in earnings growth. Sales surged by 12% to $93.1 billion, following a period of five consecutive quarters characterized by decreasing sales. The energy major had maintained its status as one of the most lucrative companies in the United States.
With more than forty years of steady dividend increases, Exxon Mobil Corporation (NYSE:XOM) is a top choice for dividend aristocrat stocks for investment today. Its dividend yield has averaged 2.20% annually in the last five years. The company has committed to investing $20 billion and $25 billion yearly in capital expenditures until 2027. The company’s dividend yield is 3.29%, affirming a consistent shareholder return.
The number of hedge funds investing in Exxon Mobil Corporation (NYSE:XOM) increased from 81 in the first quarter of 2024 to 92 in the second quarter of 2024.
Madison Dividend Income Fund stated the following regarding Exxon Mobil Corporation (NYSE:XOM) in its first quarter 2024 investor letter:
“This quarter we are highlighting Exxon Mobil Corporation (NYSE:XOM) as a relative yield example in the Energy sector. XOM is a leading integrated oil and natural gas company. It has upstream assets that develop and produce oil and natural gas, along with downstream refining and chemical manufacturing assets. We believe it has attractive low-cost acreage in the Permian basin and has a sizeable growth opportunity in Guyana. Further, we think XOM has a sustainable competitive advantage due to size and scale, and its ability to integrate refining and chemical assets provides a low-cost advantage versus competitors.
Our thesis on XOM is that it will grow production volumes of oil and gas moderately over the next few years, while limiting excessive capital investment that plagued the industry from 2014-2020. Production growth will come from its 2023 acquisition of Pioneer Natural Resources, which is the largest producer in the Permian basin. XOM plans to double its Permian output by 2027, to 2 million barrels per day. Capital spending will be limited to $20-25 billion per year through 2027, which should allow for significant amounts of cash to be returned to shareholders including a $35 billion share repurchase program and continued dividend increases. Higher oil prices would provide a tailwind to our thesis but are not necessary. We think XOM can grow earnings and cash flow if oil prices remain above $60 per barrel…” (Click here to read the full text)
The best LNG stocks to buy now offer some of the best ways of diversifying an investment portfolio in the energy sector amid the ongoing transition from coal to LNG. However, given that the artificial intelligence arms race is just but starting, there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than the top activist investment plays, check out our report about the cheapest AI stock.
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