In this article, we are going to discuss the 10 cheap energy stocks to buy now.
The energy sector breathed a huge sigh of relief this week, following a surprising truce between the United States and China to drastically roll back tariffs on each other’s goods for an initial period of 90 days. The two countries are the largest oil consumers in the world, representing over 30% of global oil consumption. As a result, global crude prices shot up, with the West Texas Intermediate (WTI) price currently hovering just below $63 per barrel, up from a multi-year low of $57.13 it hit last week. That said, crude oil’s upside potential remains limited because of its abundant supply, especially after a recent decision by OPEC+ to further raise output in June.
READ ALSO: 13 Best Energy Stocks to Buy Right Now
Despite the recent uptick, crude oil remains below the $65 break-even mark for most producers operating in the prolific Permian Basin in the US, forcing them to potentially stop drilling and cut jobs. As a result, for the first time in over a decade, US crude oil production is projected to decline in the coming year, despite the repeated calls by President Trump to ‘drill, baby, drill’. The tariffs on steel and aluminum have also raised costs for oilfield operators, further reducing margins for the industry.
However, in spite of the bleak market outlook and plunging prices, a number of major oil and gas players have reported better-than-expected results over the last couple of weeks. Though several of these companies have cut back on capital expenditure given the current market conditions, shareholder returns remain strong. A number of oil supermajors are sticking to their commitments to return billions of dollars in dividends and share repurchases, even if they have to resort to borrowing for the time being.
Oil and gas companies have historically been strong dividend stocks. However, given the tough outlook for crude oil, their largest source of revenue, they will have to build up on other means of income to maintain such high levels of payouts. A significant opportunity has recently emerged in the form of liquified natural gas, or LNG.
According to a London-based industry supermajor, the global demand for LNG is estimated to surge by around 60% by 2040, driven largely by economic growth in Asia, the ongoing AI boom, and efforts to cut emissions in heavy industries and transportation. Countries like China and India are investing heavily to increase their LNG import capacity and gas-related infrastructure to meet rising demand.
The United States of America is already the top LNG exporter in the world, with a record 11.9 billion cubic feet per day of outflows in 2024. These numbers are now expected to receive a significant boost after the Trump administration lifted the moratorium on new LNG export permits, and several new export facilities are set to come online this year. As a result, the US Energy Information Administration has projected the country’s LNG exports to 15.2 bcfd in 2025.
Europe remains the top destination for American LNG, accounting for over 75% of total orders this year. China, being the top importing country of LNG in the world, is also a big potential market. However, due to the ongoing tariff war, Chinese imports of American LNG have come to a halt. According to commodity analysts Kpler, no cargoes of American LNG have arrived at Chinese ports since February. That said, this could be an important talking point between the two countries as they try to normalize their relationship and revive trade.
With that said, here are the Cheapest Energy Stocks to Buy Right Now.
Our Methodology
To collect data for this article, we looked for companies operating in the energy sector with forward P/E ratios of below 11 as of the close of May 11, 2025. Then, we identified companies that have delivered returns of at least 50% over the last five years, in order to steer clear of potential value traps. Moreover, to make sure we keep our list relevant, we have only shortlisted companies with a market cap of $10 billion or above. The following are the Most Undervalued Energy Stocks to Buy Now.
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).
10. Diamondback Energy, Inc. (NASDAQ:FANG)
Forward P/E Ratio as of May 11: 10.79
Diamondback Energy, Inc. (NASDAQ:FANG) is an independent oil and natural gas company, focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in West Texas.
Diamondback Energy, Inc. (NASDAQ:FANG) completed its $26 billion merger with Endeavor Energy Resources last year, making it the third-biggest oil producer in the Permian and the sixth biggest in the continental US. As a result, the company reported a staggering 84.5% YoY jump in Q1 2025 production to 850,656 barrels of oil equivalent per day (boe/d). Diamondback’s revenue also grew by almost 82% YoY to $4.05 billion, beating expectations by $294.25 million. Moreover, the higher output and a jump in natural gas prices helped Diamondback post an adjusted EPS of $4.54 in the first quarter, topping estimates of $4.2.
Diamondback Energy, Inc. (NASDAQ:FANG) maintains a strong balance sheet, with its net cash provided by operating activities coming in at $2.4 billion in the first quarter. The company generated an adjusted free cash flow of $1.6 billion, of which it returned approximately 55% to its shareholders in the form of stock repurchases and dividends. FANG recently declared a quarterly cash dividend of $1 per share and currently boasts an annual dividend yield of 3.8%, putting it among the 10 Energy Stocks with Fat Dividends.
9. ConocoPhillips (NYSE:COP)
Forward P/E Ratio as of May 11: 10.78
ConocoPhillips (NYSE:COP) is one of the largest independent E&P companies in the world based on oil and natural gas production and proved reserves.
ConocoPhillips (NYSE:COP) significantly bolstered its footprint with the $22.5 billion acquisition of Marathon Oil last year, adding over 2 billion barrels of low-cost oil and gas resources to its portfolio. As a result, the company’s Q1 2025 production stood at 2.38 million barrels of oil equivalent per day (mmboed), up 487,000 boepd from a year earlier. COP’s revenue also jumped by over 18% YoY to $17.1 billion, well above expectations by almost $1.2 billion. The energy firm’s adjusted profit came in at $2.09 per share, beating estimates by $0.04. ConocoPhillips reported an operating cash flow of $5.5 billion during the quarter and distributed $2.5 billion to shareholders. The company is known for its commitment to shareholders, boasting a streak of 10 consecutive years of dividend growth.
Given the tough economic outlook threatening the global oil industry, ConocoPhillips (NYSE:COP) has announced to reduce its FY 2025 capital budget by $450 million to $12.3 billion-$12.6 billion, but ensured that it would have no impact on its production levels.
8. Schlumberger Limited (NYSE:SLB)
Forward P/E Ratio as of May 11: 10.66
Ranking at number 8 on our list of Cheap Energy Stocks is Schlumberger Limited (NYSE:SLB), the world’s leading provider of technology for reservoir characterization, drilling, production, and processing to the global energy industry. The company’s clients include major oil and gas producers worldwide.
Schlumberger Limited (NYSE:SLB) missed forecasts in Q1 2025 as its adjusted EPS of $0.72 fell slightly below estimates by $0.01, primarily due to a significant reduction in drilling activity in Mexico. The company’s revenue of $8.49 billion also missed expectations by $102.52 million. Schlumberger’s Latin America revenue declined by 10% YoY to $1.50 billion, with total international revenue falling by 5% YoY to $6.73 billion. North America, however, posted an 8% YoY revenue increase, partly supported by strong growth in data center infrastructure.
On the plus side, Schlumberger Limited (NYSE:SLB) revealed that it has made progress in diversifying beyond fossil fuels, with its combined revenue from CCS, geothermal, critical minerals, and data center solutions on pace to visibly exceed $1 billion in 2025. The news is especially welcomed given the plunging crude oil price and a resultant expected slowdown in drilling activity. Moreover, SLB’s cash flow from operations more than doubled to $660 million in Q1, resulting in a positive free cash flow of $103 million. The company has pledged to spend more than 50% of its free cash flow on dividends and share buybacks, with a commitment to return at least $4 billion to shareholders in 2025.
Ariel Investments stated the following regarding Schlumberger Limited (NYSE:SLB) in its Q1 2025 investor letter:
“Additionally, we purchased Schlumberger Limited (NYSE:SLB), the largest oilfield services company in the world by revenue. SLB provides equipment, services and digital tools to help oil and gas producers operate more efficiently, including reservoir characterization, rig and well construction and production enhancement. We believe the company’s scale and technical expertise are key differentiators. Weak near-term demand, an oil glut, falling commodity prices and concerns about future spending amid a global shift to renewable energies presented an attractive entry point. We believe there are tailwinds supporting rising demand over the medium-term, as national oil companies invest in long-cycle projects to grow capacity and address the natural decline of production. Additionally, we expect SLB will continue to evolve their capabilities to help clients with rising energy needs going forward.”
7. MPLX LP (NYSE:MPLX)
Forward P/E Ratio as of May 11: 10.52
Formed in 2012 by Marathon Petroleum Corporation, MPLX LP (NYSE:MPLX) owns and operates midstream energy infrastructure and logistics assets and provides fuels distribution services.
MPLX LP (NYSE:MPLX) generated nearly $1.8 billion of EBITDA in Q1 2025, up 7% from the prior year. The company’s EPS of $1.1 was in-line with expectations, while its revenue of $3.12 billion fell below estimates by $40 million. The company’s distributable cash flow for the quarter came in at $1.5 billion, which supported nearly $1 billion of distribution to its shareholders and $100 million in share repurchases.
MPLX LP (NYSE:MPLX) continues to grow and expand its footprint, with announcements of over $1 billion of strategic acquisitions since the beginning of the year. The company is in the process of expanding the BANGL NGL pipeline’s capacity, which it expects to complete in July. It is also building the Secretariat and Harmon Creek III natural gas processing plants, an LPG export terminal and related pipeline, and several other projects, which are expected to significantly improve its cash flow through the end of the decade. MPLX’s plans include spending $1.7 billion of capital on growth projects in 2025.
6. Energy Transfer LP (NYSE:ET)
Forward P/E Ratio as of May 11: 10.38
Energy Transfer LP (NYSE:ET) is one of the largest and most diversified midstream energy companies in North America, with approximately 130,000 miles of pipelines and associated energy infrastructure in 44 states.
Energy Transfer LP (NYSE:ET) reported net income attributable to partners for Q1 2025 to be $1.32 billion, compared to $1.24 billion for the prior year period. The company’s EPS of $0.36 was in-line with market expectations. ET generated over $2.3 billion of distributable cash flow during the quarter, down slightly from less than $2.4 billion in the year-ago period.
Energy Transfer LP (NYSE:ET) recently increased its quarterly dividend by 3% to $0.3275 per share. The company has plans to continue increasing its distribution by about 3% to 5% a year moving forward and boasts an impressive annual dividend yield of 7.61%.
Energy Transfer LP (NYSE:ET) remains focused on expansions, with plans to spend $5 billion on growth projects this year. The company is making progress on its Lake Charles LNG facility and expects to make a final decision on whether to go through with the long-awaited project by the end of the year. Moreover, it recently secured a groundbreaking agreement with CloudBurst Data Centers, marking its first publicized partnership in the data center space. With interest from over 70 prospective data centers across 12 states, ET is set to benefit significantly from the increasing demand for reliable energy sources.
5. Permian Resources Corporation (NYSE:PR)
Forward P/E Ratio as of May 11: 10.16
Permian Resources Corporation (NYSE:PR) is an independent oil and natural gas company with operations focused in the Permian Basin, with assets concentrated in the core of the Delaware Basin.
Permian Resources Corporation (NYSE:PR) had a very strong Q1 2025, highlighted by strong operational performance and lower costs. The company reported an adjusted EPS of $1.06, beating expectations by $0.24. PR’s revenue also surged by over 37% YoY to $2.61 billion, topping estimates by more than $416 million. Q1 output exceeded expectations, with oil production of 175,000 barrels of oil per day and total production of 373,000 barrels of oil equivalent per day.
Permian Resources Corporation (NYSE:PR) managed to achieve the highest free cash flow per share in its history of $0.54 per share, driven by lower per-unit cost and solid production performance. PR recently declared a dividend of $0.15 per share for Q2 and maintained that it currently has a $1 billion share repurchase authorization in place.
Permian Resources Corporation (NYSE:PR) revealed that it has approximately 25% of 2025 oil production hedged at a price just above $73 per barrel, allowing it to be more opportunistic during a downturn when investments can earn the highest return. Moreover, thanks to the company’s current cost structure and consistent well performance, it can generate the same free cash flow this year if oil remains at $60 as it did last year at $75.
The share price of Permian Resources Corporation (NYSE:PR) has surged by an eye-watering 1,450% over the last five years.
4. First Solar, Inc. (NASDAQ:FSLR)
Forward P/E Ratio as of May 11: 9.01
Coming at number 4 on our list of Cheap Energy Stocks to Invest in is First Solar, Inc. (NASDAQ:FSLR), a leading American solar technology company and global provider of responsibly produced eco-efficient solar modules. FSLR is unique among the ten largest solar manufacturers in the world for being the only US-based company and not manufacturing in China.
First Solar, Inc. (NASDAQ:FSLR) remains focused on manufacturing a proprietary, advanced thin-film module, which can perform better than competing silicon modules in less-than-ideal conditions, such as low light and hot weather. Its panels are also larger in size, reducing the cost per watt and making them ideal for utility-scale projects.
First Solar, Inc. (NASDAQ:FSLR) had a difficult Q1 2025 as its EPS of $1.95 missed expectations by a hefty $0.6. The company’s revenue of $844.57 million, though in-line with market estimates, was down sharply from $1.5 billion in Q4 2024, primarily due to ‘an anticipated seasonal reduction in the volume of modules sold.’ That said, FSLR maintains one of the strongest balance sheets in the solar industry, with $0.4 billion in net cash at the end of Q1. The company expects to close 2025 with $700 million – $1.2 billion in net cash, giving it flexibility to continue innovating its thin-film solar modules and expand its manufacturing capacity.
The share price of First Solar, Inc. (NASDAQ:FSLR) plunged recently after its CEO, Mark Widmar, stated that the scale and depth of President Donald Trump’s tariffs were unexpected and posed a ‘significant economic headwind’ to the company’s manufacturing facilities. As a result, the company has had to cut its FY 2025 earnings and revenue forecasts. FSLR has also now been downgraded by several analysts, since Wall Street previously viewed the solar energy firm as the best-positioned company in the industry to weather tariffs because it has invested in domestic manufacturing facilities.
3. Shell plc (NYSE:SHEL)
Forward P/E Ratio as of May 11: 8.57
Shell plc (NYSE:SHEL) is a global group of energy and petrochemical companies, employing 103,000 people and with operations in more than 70 countries. The company is also the number one global lubricant supplier, as well as the top player in the rapidly expanding LNG sector.
Shell plc (NYSE:SHEL) reported an adjusted EPS of $1.84 in Q1 2025, beating expectations by $0.23. However, the plunging oil prices and declining refining margins reduced the energy giant’s net profit by 28% YoY to $5.58 billion. The company’s revenue of $69.23 billion was also down 4.5% YoY and missed estimates by almost $9.9 billion. Shell generated $9.3 billion in cash flow from operating activities in the first quarter, while its free cash flow came in at a little over $5.3 billion.
Shell plc (NYSE:SHEL) remains committed to its shareholders despite the tough market conditions. The company recently revealed that it would reduce its spending to $20-22 billion annually through 2028, while increasing shareholder distributions to 40-50% of cash flow from operations, up from 30-40% previously. Earlier this month, Shell also announced another $3.5 billion share buyback program, marking its 14th consecutive quarter of a buyback program of at least $3 billion.
There are reports that Shell plc (NYSE:SHEL) is currently working with advisers to evaluate a potential acquisition of rival BP Plc, though it is waiting for further stock and oil price declines before making a final decision. However, it must be noted that when asked about the matter, Shell’s CEO Wael Sawan recently stated that he would rather buy back more of his company’s own shares than launch a takeover bid for rival oil major BP.
2. Devon Energy Corporation (NYSE:DVN)
Forward P/E Ratio as of May 11: 8.28
Devon Energy Corporation (NYSE:DVN) is a leading independent energy company engaged in finding and producing oil and natural gas, with operations focused onshore in the United States.
Devon Energy Corporation (NYSE:DVN) missed profit estimates in Q1 2025 as its adjusted EPS of $1.21 fell slightly below expectations by $0.01, as lower oil prices offset higher production. The company’s revenue, however, surged by 23.8% YoY to $4.45 billion, beating forecasts by $80 million. DVN bolstered its portfolio last year with the $5 billion acquisition of certain assets of Grayson Mill Energy. As a result, the company’s production rose 22.7% YoY during the first quarter to 815 thousand barrels of oil equivalent per day (MBoepd).
Devon Energy Corporation (NYSE:DVN) generated $1 billion in free cash flow in Q1. Moreover, the company recently announced plans to boost its annual free cash flow by $1 billion by the end of 2026 by reducing drilling and completion costs and improving operating margins. It seems to be working already since earlier this month, DVN cut its CapEx plan by $100 million to between $3.7 billion and $3.9 billion, while also raising its current-year oil production forecast by 1% to between 382,000 and 388,000 barrels per day.
1. TotalEnergies SE (NYSE:TTE)
Forward P/E Ratio as of May 11: 8.08
Topping our list of Cheap Energy Stocks is TotalEnergies SE (NYSE:TTE), a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables, and electricity.
TotalEnergies SE (NYSE:TTE) had a tough Q1 2025 as its net adjusted profit dropped 18% YoY to $4.2 billion, despite boosting oil and gas production by 4% from a year ago. The oil major’s revenue also fell by 7.7% to $47.9 billion, but it still managed to beat estimates by $3 billion. Total’s LNG business, however, performed well, with adjusted net operating income of $1.3 billion, up 6% YoY. The French company is already the top exporter of American LNG and is planning to expand its portfolio even further, most recently via a 20-year contract signed last month with NextDecade.
TotalEnergies SE (NYSE:TTE) boasts an impressive dividend yield of 5.85% and raised its interim dividend by 7.6% to €0.85 earlier this year. However, investors are concerned after the energy giant reported a net debt of $20.1 billion at the end of Q1 2025, up 42% from a year ago. The company stated that it had to borrow in order to maintain share buybacks of up to $2 billion in the second quarter and boost dividends, especially with Brent crude prices currently hovering around the $65 mark.
Overall, TotalEnergies SE (NYSE:TTE) ranks first on our list of the cheap energy stocks to buy now. While we acknowledge the potential of TTE to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TTE but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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