Growth Potential (and a Little Income) in Energy: Halliburton Company (HAL), Apache Corporation (APA)

Page 1 of 2

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some energy stocks to your portfolio, the Vanguard Energy (NYSEARCA:VDE) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The energy ETF’s expense ratio — its annual fee — is a very low 0.14%. (Vanguard is known for low fees.) It also recently yielded 1.8%.

Halliburton Company (NYSE:HAL)This ETF has performed well, topping the world markets over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

With a low turnover rate of 12%, this fund isn’t frantically and frequently rejiggering its holdings, as many funds do.

Why energy?
Energy is a defensive sector, as demand for it doesn’t drop by a lot when economic times get tough. Interest in alternative energies is definitely growing, but we’re still quite dependent on good old oil and gas. Thus, oil and gas exploration and production companies are worth considering — and some of them have been getting involved in alternative energies, too.

More than a handful of energy companies had strong performances over the past year. Drilling services giant Halliburton Company (NYSE:HAL) , for example, advanced 13%, despite being affected by a glut of natural gas leading many to cut back on drilling operations. On the other hand, though, the company’s expertise in mature fields, unconventional markets, and deep drilling are pluses. And its revenue growth rates have been accelerating in recent years, firmly in double-digit territory. Some also like Halliburton’s expanding work in developing economies such as Brazil. Latin American operating income rose 25% in the fourth quarter.

Other companies didn’t do as well last year, but could see their fortunes change in the coming years. Independent oil and gas producer Apache Corporation (NYSE:APA) shed 15% but maintains competitive advantages such as its geographic diversification, with operations not only in North America but also places such as Egypt, Argentina, and Australia. The company has spent some $16 billion on acquisitions in the past few years. Some see the stock as attractively priced right now, with a forward P/E ratio of 7.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!