Owing to the prevailing geopolitical concerns worldwide, oil and gas supply and demand are being disrupted continuously, leading to high price volatility. As a consequence, the oil and gas market is trending all over the world, offering more opportunities for investors.
Given the industry tailwinds, it could be wise to invest in sound energy stocks Chevron Corporation (CVX), Shell plc (SHEL), and Cheniere Energy, Inc. (LNG) for potential gains.
Over time, energy consumption across the globe has only increased, and the rally is expected to continue in the upcoming years. By 2045, primary energy consumption is expected to reach 359 million barrels of oil equivalent per day. Also, oil and gas will continue to dominate the global energy sector with their contribution of over 100 and 85 million barrels of oil equivalent per year.
Besides, IMARC Group has projected the global oil and gas market to value $65.80 billion by 2032, exhibiting a CAGR of 15.8%. The oil and gas market is currently favored by trends like rising geopolitical tensions, technological advancements, and shifting environmental policies driving the market demand.
Also, the rapidly maturing LNG industry is expanding at a swift pace, with the liquefied natural gas trade growing at a quadrupled rate in the last two decades and set to grow twice in the next two decades. With the growing production and prevalence of unconventional gas extraction, the market is positioned for robust growth.
The LNG Market is expected to grow to $103.41 billion by 2028, expanding at a CAGR of 6.8%, driven by increasing demand for gas power generation and a growing number of LNG-fueled fleets.
Also, investors’ interest in energy stocks is evident from the Dimensional Emerging Core Equity Market ETF’s (DFAE) 21.7% returns over the past year.
Given the industry’s robust outlook, let’s delve into the fundamentals of the top Energy – Oil & Gas stocks, beginning with number 3.
Stock #3: Chevron Corporation (CVX)
CVX is engaged in integrated energy and chemicals operations internationally. The company operates through two segments, Upstream; and Downstream. It is involved in the exploration, development, production, and transportation of crude oil and natural gas, processing, liquefaction, transportation, and regasification of liquefied natural gas.
On August 12, CVX started oil and natural gas production from the Anchor project in the deepwater U.S. Gulf of Mexico. The Anchor production marked the successful delivery of high-pressure technology rated to safely operate at up to 20,000 psi, with reservoir depths reaching 34,000 feet below sea level.
On April 25, CVX’s affiliate Tengizchevroil LLP started its operations at its Wellhead Pressure Management Project at the Tengiz oil field in Kazakhstan. The WPMP is designed to maintain the existing processing plants' total capacity of around 28 million tonnes per annum. This marked a significant step toward completing the Future Growth Project (FGP).
During the second quarter that ended June 30, 2024, CVX’s total revenues and other income increased 4.7% year-over-year to $51.18 billion. Net income attributable to CVX came in at $4.43 billion and $2.43 per common share for the quarter, respectively.
In addition, the company’s cash and cash equivalents and total assets stood at $4.01 billion and $260.64 billion as of June 30, 2024.
Street expects CVX’s revenue for the fourth quarter (ending December 2024) to grow 2.7% year-over-year to $48.44 billion, and its EPS is expected to be $2.80. Also, over the past month, CVX’s stock has gained marginally to close the last trading session at $147.54.
CVX’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
CVX has a B grade for Quality and Stability. It is ranked #52 out of 80 stocks in the Energy – Oil & Gas industry.
In addition to the POWR Ratings we’ve stated above, we also have other CVX ratings for Momentum, Sentiment, Growth, and Value. Get all CVX ratings here.
Stock #2: Shell plc (SHEL)
Headquartered in London, United Kingdom, SHEL is an energy and petrochemical company operating in Europe, Asia, Oceania, Africa, the United States, and the rest of the Americas. The company operates in Integrated Gas; Upstream; Marketing; Chemicals and Products; and Renewables and Energy Solutions segments.
On August 1, SHEL’s Board announced an interim dividend in respect of the second quarter of 2024 of $ 0.34 per ordinary share. SHEL pays an annual dividend of $2.73, which translates to a yield of 3.95% at the current share price. Its four-year average dividend yield is 3.09%.
On July 9, SHEL’s subsidiary, Shell Trinidad and Tobago Ltd., announced its Final Investment Decision (FID) on the Manatee project, an undeveloped gas field in the East Coast Marine Area in Trinidad and Tobago. Manatee will enable SHEL to competitively grow its Integrated Gas business by building on development efforts in the ECMA.
Through this, the company will be able to meet the rising demand for natural gas globally, and the energy needs domestically in Trinidad and Tobago.
During the second quarter that ended June 30, 2024, SHEL’s adjusted earnings rose 24% from the prior year’s quarter to $6.29 billion and its adjusted EBITDA increased 16.4% year-over-year to $16.81 billion. Also, the company’s cash flow from operating activities came in at $13.51 billion for the quarter.
In addition, as of June 30, 2024, the company’s cash and cash equivalents and total assets were $38.15 billion and $394.78 billion, respectively.
Street expects SHEL’s revenue for the first quarter (ending March 2025) to increase 8.9% year-over-year to $78.90 billion. Its EPS is expected to be $1.97 for the same period. Furthermore, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
Over the past six months, SHEL’s stock has gained 2.5% and 6.8% over the past year to close the last trading session at $69.08.
SHEL’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Stability. Within the Energy – Oil & Gas industry, SHEL is ranked #45 of 80 stocks.
Click here to access other ratings of SHEL for Sentiment, Growth, Momentum, Quality, and Value.
Stock #1: Cheniere Energy, Inc. (LNG)
LNG is an energy infrastructure company primarily engaged in liquefied natural gas (LNG) related businesses. The company owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana, and the Corpus Christi LNG terminal near Corpus Christi, Texas.
On August 5, LNG’s subsidiary Cheniere Marketing, LLC, entered into a long-term liquefied natural gas sale and purchase agreement with Galp Trading S.A., a subsidiary of Galp Energia, SGPS, S.A. Under the agreement, Galp will purchase about 0.5 million tonnes per annum of LNG from Cheniere Marketing for 20 years on a free-on-board basis.
On June 17, LNG’s Board of Directors declared a quarterly cash dividend of $0.43 per common share, paid on August 16, 2024, to shareholders of record as of the close of business on August 9, 2024. LNG pays an annual dividend of $1.74, which translates to a yield of 0.95% at the current share price. Its four-year average dividend yield is 0.61%.
For the second quarter that ended June 30, 2024, LNG reported revenues of $21.63 billion. Net income attributable to Cheniere amounted to $880 million and $3.84 per share for the quarter, respectively. Also, the company’s consolidated adjusted EBITDA was $1.32 billion.
Street expects LNG’s revenue for the first quarter (ending March 2025) to increase 10.5% year-over-year to $4.70 billion. The company’s EPS for the same quarter is expected to grow 17.3% year-over-year to $2.50. Moreover, the company has topped the consensus revenue and EPS estimates in three of the trailing four quarters.
LNG’s stock has surged 13.9% over the past six months and 11.1% over the past year to close the last trading session at $182.33.
LNG’s bright prospects are reflected in its POWR Ratings. LNG has a B grade for Momentum and Sentiment. LNG is ranked #18 among the 80 stocks in the same industry.
Click here to access LNG’s ratings for Quality, Growth, Value, and Stability.
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CVX shares were trading at $147.76 per share on Tuesday afternoon, up $0.22 (+0.15%). Year-to-date, CVX has gained 2.29%, versus a 20.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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