Top 7 Energy Stocks to Invest in 2024 as the Economy Booms!
Well, the concept of buying energy stocks is quite controversial. Energy stocks are often perceived as uncertain and volatile, making investors skeptical about investing in them. But buying energy stocks or not boils down to a simple equation. If there has to be a broader economic recovery, more people use more resources. Thus, the entire spectrum of energy resources could be high in demand.
There is an extensive list of Energy stocks to buy that you must go through before going ahead with the investment. The hydrocarbon industry, too, would experience revitalization, particularly in terms of investment opportunities. First, hydrocarbons are always a necessary energy source because of their high density. Fossil fuels, however, lost ground to the political and ideological movement toward green and renewable energy sources.
If the job market keeps producing strong statistics, the tables will turn.
Now, take a look at the top seven energy stocks that you must consider investing in, considering the booming economy.
1. HF Sinclair (NYSE: DINO)
Currently, DINO is trading below the industry median of 9.67X with a trailing-year earnings multiple of 5.08X. also tradesding at a discount to 77.4% of its sector competitors, at 0.34X trailing-year sales.
The truth is that HF Sinclair is not an incompetent buy. Operationally, the business outperforms over 72% of its rivals with a three-year revenue growth rate of 21.8%. EBITDA growth during the same period came in at 29.3%. That outperforms more than 66% of its competitors.
Despite its overwhelming everyday relevance, HF Sinclair is still one of the more inexpensive energy stocks to buy. Considering that the high-side goal is likewise $76, purchasing DINO is a compelling option for energy stocks.
2. Brookfield Renewable Partners (NYSE: BEP)
One of the top producers of renewable energy worldwide is Brookfield Renewable Partners Stock. It manages energy transition, solar, wind, and hydropower resources. Under long-term fixed-rate power purchase agreements (PPAs), the corporation sells the electricity generated by these assets to electric utilities and other major power customers.
In addition to other growth drivers, including increased electricity costs and acquisitions, Brookfield projects that its funds from operation (FFO) per share will rise by more than 10% a year until 2027. This should allow for 5% to 9% annual dividend growth, making Brookfield a superior choice for buying renewable energy stock.
3. Occidental Petroleum (NYSE: OXY)
The current geopolitical landscape should help Occidental’s story come to life. Since many of the world’s hydrocarbons originate from dubious jurisdictions, creating more secure supply networks makes sense.
Occidental Petroleum (NYSE: OXY), which focuses on hydrocarbon exploration, operates in the upstream segment of the energy value chain. OXY, for instance, is currently trading at 12.61X trailing-year earnings.
By comparison, Occidental runs a little hotter than the sector medi is 9.67X. Insider buying, however, gives the company’s shareholders a significant boost in confidence.
Furthermore, purchasing activity is equally as essential as insider acquisitions.
4. Exxon Mobil (NYSE: XOM)
Exxon Mobil (NYSE: XOM), one of the most extensive global integrated fuels, lubricants, and chemical corporations, deserves a spot in your portfolio. Of course, big oil may seem less and less relevant in light of the larger drive toward electric vehicles. But, given that EVs are stranded due to the harsh winter weather, individuals may reconsider the turn.
In all fairness, the 11.34X earnings multiple is a little below average. Nonetheless, the business has notable operational advantages, notably its 62.4% three-year EBITDA growth rate. With the notable exception of the Covid-19 pandemic, it has been profitable continually.
In essence, XOM is one of the best energy stocks to buy.
5. NextEra Energy (NYSE: NEE)
Discussing renewable energy companies without bringing up NextEra Energy (NYSE: NEE) is difficult. In the long run, management anticipates that U.S.-based infrastructure projects will cost between $85 billion and $95 billion by 2025. Fortune’s 2023 World’s Most Admired Companies List has it at #1 in the electric and gas utilities category.
NEE stock had a lot of volatility last year. NextEra outperformed Wall Street forecasts for revenue and profits per share in Q4 2023. Analysts see shares as a moderate buy. They project an average price objective for the upcoming year of $69.60.
6. Devon Energy (NYSE: DVN)
Devon Energy (NYSE: DVN), a well-known independent energy provider, is concentrated on locating and producing natural gas and oil. The justification for increasing the demand for crude oil seems clear since the economy is growing, and more people are excitedly joining the industry.
However, the demand for natural energy should also increase in the long run. The math is the same: as more people use resources, there should be a drop in supply and a price increase.
With a $54.87 price objective, analysts rank the shares as a moderate buy-in agreement. Given a firm estimate, DVN is among the finest energy companies to purchase at a reduced price.
7. Enbridge (NYSE:ENB)
With the support of long-term contracts and pricing structures that the government governs, Enbridge’s leading energy infrastructure portfolio produces extremely steady cash flow. The corporation distributes 60% to 70% of that consistent cash flow to investors in the form of an enticing dividend. It keeps the remainder to aid in funding its ongoing growth.
The corporation has a clear path to future growth with a backlog of commercially secured expansion projects valued at billions of dollars. For the medium term, Enbridge anticipates that its cash flow per share will grow at a pace of nearly 5% per year and by around 3% annually through 2025.
Summary
Experts advise you to approach investing with a diverse portfolio. They recommend choosing tens, hundreds, or even thousands of stocks to invest in rather than just a small number.
By doing this, you can avoid falling victim to the problems of a select few organizations while experiencing the highs of other businesses.
If that sounds complicated, you can invest in exchange-traded funds (ETFs) and index funds for the energy sector.
You might also look at ones that follow important energy industry indices, such as the S&P 500 Energy.
