The 13 Best Energy Stocks to Buy Now

The energy sector has grown to be a critical part of the global economy. It is the source of fuel and electricity needed to keep the economy running. It is also a good sector to invest in as there is always demand for energy and power and some of the biggest companies in the world are in the energy sector. This provides great investment opportunities and this article will be examining thirteen energy companies whose stocks are excellent for investment.

Occidental Petroleum Corp. (NYSE: OXY)

This company is involved in exploring and producing oil and natural gas with its operations divided into the following segments: chemical, Midstream & Marketing, and Oil & gas. The Chemical segment specializes in the manufacture and sale of basic chemicals and vinyl. The Midstream & Marketing segment is focused on gathering, processing, purchasing, marketing, transporting, and storing oil along with natural gas, natural gas liquids, and power.
The company currently has a comparatively appealing forward price-to-earnings ratio as well as a stock repurchase plan which provides investors interested in the company’s stock with an opening for investment.

Plains All American Pipeline LP (Nasdaq: PAA)

This is an energy infrastructure company that has ownership of pipelines, terminals, storage, transportation, and gathering assets for natural gas, crude oil, and liquids of natural gas. A lot of its operations are based in the Permian Basin which holds massive growth potential for fossil fuels, especially in states such as New Mexico and Texas, two states known for producing fossil fuels in the U.S. The company’s infrastructure is critical if the U.S. intends to maintain energy security which opens the door to investors who are interested in having a fossil fuel portfolio.

NextEra Energy Inc (NYSE: NEE)

This is one of the biggest electric utility companies in the United States and globally, it is one of the leading producers of power from the wind and sun. It achieves this through its energy resources segment which oversees the sale of clean energy to other companies and final consumers in the country.
The cash flow generated by the company is relatively stable as the sale and distribution of power is supported by government-regulated rates and fixed-price PPAs with customers. The business model is highly sustainable due to the steady demand for power both domestically and commercially.
In the electric utility sector, one of the best financial profiles belongs to NextEra Energy as it has one of the highest credit ratings among its competitors. Also, for a utility company, its dividend payout ratio is conservative. A combination of these factors allows the company to pay shareholders a stable and rising dividend. NextEra expects to raise its payout at a rate of 10% annually through the year 2024 and this makes it an ideal dividend stock for renewable energy.

SunPower Corp. (Nasdaq: SPWR)

This is a company that specializes in the sales, installation, and financing of solar panels. With the stock falling by 30% over the past year, financial experts recommend it as an excellent stock for long-term investment. Also, the company is venturing into the microgrid market which experts perceive will raise the company’s value in the long run thus providing great value for investors.
Microgrids are localized energy grids that can operate autonomously without relying on the main grids. This makes them perfect for specific sites such as business parks or hospital complexes.

Sunrun Inc. (Nasdaq: RUN)

This is a company based in California that manufactures solar panels and batteries either for sale or for lease. There was a plan in California to modify the way users of solar rooftops are compensated when they provide extra power to the grid and this plan had adversely affected the shares of Sunrun. However, the plan has been put on hold indefinitely which is bound to enable the company’s shares to pick up again.
Last year, the company was able to gain over 110,000 new customers while also entering 2022 with an enormous backlog of orders. The solar industry has massive growth potential, especially with just 4% of the 77 million homes with a specific address in the U.S. having solar. Sunrun Inc. looks to capitalize on this potential and that is why it is an excellent choice for anyone looking to invest in the solar industry.

Hannon Armstrong Sustainable Infrastructure Capital Inc. (NYSE: HASI)

This company primarily makes capital available to companies that offer products and services in the fields of renewable energy, energy efficiency, and other sustainable infrastructure markets in the United States while also claiming to be the first public company in the country to only specialize in climate solution investments.
In 2021, the company’s revenue increased by 14% and in February of this year, the company declared that it expects its annual distributable earnings per share to increase by 10% to 13% compound annual rate between 2021 and 2024 with the year 2020 as a baseline. Also, annual dividends are expected to experience a 5% to 8% compound annual growth rate. Even the dividend yield of 3% being paid currently by the company is highly attractive and makes it an excellent choice of investment.

Cheniere Energy Inc. (NYSE: LNG)

The United States used to previously import liquefied natural gas or LNG but the boom of shale gas and investment in facilities for the liquefication of the gas has turned the country from an importer into the largest exporter of the commodity in the world. Right in the center is Cheniere Energy as it is the largest U.S. exporter with the two LNG terminals the company operates along with the liquefaction projects it is handling.
The company owns one of the biggest liquefaction platforms on the planet with two major facilities in Texas and Louisiana while also looking for more opportunities to expand. A major part of its LNG is sold under long-term fixed-rate contracts which allows the company to generate cash flow at a predictable rate. It is expected that the company will generate a cumulative $10 billion in cash flow that can be distributed through 2024.
The cash flow will be allocated to paying dividends (which it started late last year), repurchasing shares, paying down debt, and funding expansion on one of its terminals. This balanced plan of capital allocation should help the company to generate substantial value for its shareholders in the years to come.

Orsted (OTC: DNNGY)

This company is involved in providing renewable energy solutions. The company’s business segment includes Bioenergy & Thermal Power, Distribution & Customer Solutions, and Wind Power. The Bioenergy & Thermal Power segment encompasses the generation of heat and power through a gas-fired power plant in the Netherlands, a Renescience plant in the UK, and a combination of heat and power plants in Denmark.
The Distribution & Customer Solutions segment involves distributing power as well as selling gas and power in retail and wholesale markets across Denmark, Germany, the UK, and Sweden. The third segment is the Wind Power segment which comprises the development, construction, and operation of offshore wind farms in various countries in the world such as the UK, Taiwan, the Netherlands, Germany, Denmark, and the USA.
The operations in the USA are about to increase in value due to the boom that is expected in U.S. offshore wind. In the fourth quarter of last year, the company reported a net profit increase of 49% year on year while earnings in the company’s offshore business had a 27% increase before accounting for interest, amortization, depreciation, and taxes.

Brookfield Renewable (NYSE: BEP; NYSE: BEPC)

This company is one of the leading producers of renewable energy in the world as it operates assets in the field of wind, solar, and hydroelectric. The power generated by these assets is sold to electric utility companies and other large users of power under long-term fixed-rate power purchase agreements (PPA). These contracts allow the company to generate cash flows at a relatively steady pace of which most are used to pay shareholders an attractive dividend. The remaining is used for the acquisition, development, and expansion of the company’s renewable energy operations.
Brookfield Renewable has an astronomical backlog of development projects on renewable energy. Add that to other facilitators of growth like higher power prices and acquisitions, the company projects that its cash flow per share will grow as much as 20% every year through 2026. This will support a 5% to 9% annual dividend growth thus making the company an excellent choice for investing in renewable energy.

ConocoPhillips (NYSE: COP)

This is a diversified producer of oil and natural gas with operations around the globe while using various methods in the production of oil and natural gas. The low operating costs of ConocoPhillips distinguish it from its competitors while also having an average cost of supply of less than $30 per barrel. The low cost of supply is complemented by a strong balance sheet as the company has an investment-grade bond rating that is supported by a low leverage ratio. This positions the company to get through the usual periods when the prices of oil and gas are low.
With low operating costs, ConocoPhillips is well-positioned to generate substantial cash flow in the years to come. The company estimates it can generate a cumulative $80 billion in free cash flow by 2031 and that is under the assumption that the average price of oil is around $50 per barrel. But considering how oil prices in 2022 have skyrocketed, then the company should be able to generate an even greater amount of free cash flow.
The company intends to restore most of the windfall to investors as the years roll around. Furthermore, it plans to repurchase shares while also paying shareholders a growing quarterly dividend and implementing the variable return of cash payments even as excess cash is generated due to the higher prices of oil.

TC Energy (NYSE: TRP)

This is one of the biggest operators of natural gas pipelines in North America as it has pipelines in its home country of Canada, Mexico, and the United States. Additionally, the company has a superior liquids pipeline system which makes it one of the premier exporters of oil in Canada. Furthermore, it is the country’s biggest producer of power with an emphasis on renewables and nuclear energy.
The company’s energy infrastructure assets enable it to generate cash flows with relative stability. The company adopts a low-risk business model by leasing its capacity under regulated rates and contracts based on specific fees. The business model has been highly beneficial as the company generates cash flow steadily in every market environment.
The company adopts a conservative dividend payout ratio while also having a top credit rating in the pipeline sector. The combination of these factors provides the company with the financial flexibility to continue the expansion of its pipeline network and dividend. That is also the reason TC Energy is one of the companies in the energy sector with a lower risk.

Chevron Corporate (NYSE: CVX)

This is another leading global energy company that encompasses a globally integrated oil and gas business that includes a chemical business, exploration and production of assets as well as refining capabilities. With its large-scale and integrated operations, the company continues to thrive regardless of the volatility found in the energy sector.
The cash flows generated from the company’s legacy oil and gas operations are used to repurchase shares, pay a growing dividend, and make future investments. In 2022, Chevron raised its dividend, and that is the 35th consecutive year the company has done that thus making it more than qualified to be called a Dividend Aristocrat.
Part of the future investment of Chevron is the investment in carbon capture and storage technology that will enable the company to achieve its goal of reducing its carbon emissions. The company recently agreed to the acquisition of Renewable Energy Group for over $3.15 billion, a deal that will enhance the company’s ability to accomplish its goal of raising the production capacity of its renewable fuels to 100,000 barrels per day by the year 2030.
The principal aim of Chevron is to supply the fuels needed by the economy today while simultaneously working towards the required lower-carbon fuels for the future. This balance between the present and the future makes the company an excellent choice for those interested in investing in the energy transition from fossil fuels to less carbon-based alternatives.

Kinder Morgan (NYSE: KMI)

This is a leading operator of energy infrastructure in North America with the company overseeing the biggest natural gas transmission network in the United States. As of the early part of this year, the company had 71,000 miles of natural gas pipelines in addition to a storage capacity of 700 billion cubic feet.
The infrastructure of Kinder Morgan links every major company in the natural gas resource market to major demand centers. The company alone manages around 40% of all the natural gas that is consumed in and exported out of the U.S. every year. The company generates very stable cash flow through its natural gas infrastructure business; a large percentage of the cash flow is generated via hedges, take-or-pay contracts, and other fee-based arrangements. Thus over $4 billion is generated by the company in cash flow every year.
The cash flow is allocated towards the payment of a high-yielding dividend, repurchasing of shares, and expansion of the company’s natural gas network by engaging in acquisitions and capital projects. The company started the year with a backlog of expansion projects worth about $1.4 billion with 45% accounting for infrastructure relating to natural gas.