In this article, we discuss 11 high growth energy stocks to buy now. If you want to see more stocks in this selection, check out 5 High Growth Energy Stocks To Buy.
The International Energy Agency’s latest report highlights the concerning trend that the number of people without access to modern energy is increasing, reversing the progress made in the last decade. According to the report, around 75 million people who have recently gained access to electricity may not be able to afford it, while an additional 100 million people may need to rely on traditional biomass for cooking.
As per the Intergovernmental Panel on Climate Change report in April, in order to achieve the goal of limiting global warming to 1.5°C as set out in the Paris Agreement, it is necessary to reach the peak of greenhouse gas emissions by 2025 at the latest and reduce them by 43% by 2030. Dealing with emissions presents a chance for the development of the green economy. The sectors that support the transition to net-zero emissions have the potential to reach a value of $10.3 trillion for the world economy by 2050.
On the other hand, experts predict that China’s crude oil imports will reach a new high in 2023 due to an increase in demand for fuel as COVID-19 restrictions are lifted and new refineries begin operations. This is expected to be a positive factor for the oil market, which is already being supported by output cuts from the OPEC+ producer group and western sanctions on Russian exports.
According to industry consultancies including Wood Mackenzie, FGE, Energy Aspects, and S&P Global Commodity Insight, China’s crude oil imports could increase by as much as 500,000 to 1 million barrels per day (bpd) this year, potentially reaching up to 11.8 million bpd, surpassing the previous record of 10.8 million bpd in 2020. This growth would reverse the trend of declining crude oil imports over the last two years.
Investors who are interested in the energy sector can also check out 12 Top Performing Energy Stocks in January, 12 Cheap Energy Stocks To Buy, and 12 Best Performing Energy Stocks in 2022. Some of the top high growth energy stocks include Cheniere Energy, Inc. (NYSE:LNG), EOG Resources, Inc. (NYSE:EOG), and Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR).
Our Methodology
We used a stock screener and filtered for energy companies with year-over-year quarterly revenue growth of more than 20%. From the resultant dataset, we selected the energy stocks with the highest revenue growth rates as of the end of the third and fourth quarter of 2022, according to the latest data available for each firm. The list is arranged in ascending order of the year-over-year quarterly revenue growth rate.
Photo by Robin Sommer on Unsplash
High Growth Energy Stocks To Buy
11. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 64
Quarterly Revenue Growth YoY as of December 30, 2022: 23.80%
ConocoPhillips (NYSE:COP) is a Texas-based company that explores for, produces, transports, and markets crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids in the United States and internationally. On February 2, ConocoPhillips (NYSE:COP) declared a quarterly dividend of $0.51 per share, in line with previous. The dividend is payable on March 1, to shareholders of record on February 14. Furthermore, the company declared a cash payout of $0.60 per share, which will be disbursed on April 14, 2023, to shareholders who are documented as of March 29.
On January 23, Barclays analyst Jeanine Wai raised the firm’s price target on ConocoPhillips (NYSE:COP) to $160 from $151 and kept an Overweight rating on the shares. Despite projecting weaker performance for the integrated oil and exploration and production sector in Q4 compared to Q3, the analyst believes that the sector’s investment prospects are positive due to its emphasis on capital discipline and cash returns.
According to Insider Monkey’s third quarter database, 64 hedge funds were long ConocoPhillips (NYSE:COP), compared to 71 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with nearly 7 million shares worth $708.5 million.
Like Cheniere Energy, Inc. (NYSE:LNG), EOG Resources, Inc. (NYSE:EOG), and Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), ConocoPhillips (NYSE:COP) is one of the top high growth energy stocks to consider.
Diamond Hill Large Cap Strategy made the following comment about ConocoPhillips (NYSE:COP) in its Q4 2022 investor letter:
“ConocoPhillips (NYSE:COP)’ stock performed well in the market largely on the back of continued strong oil prices, even as the economic outlook became more uncertain. We continue to believe the company is one of the best operators in the space, with a diversified portfolio, assets concentrated in well understood jurisdictions, a strong balance sheet and excellent management.”
10. ONEOK, Inc. (NYSE:OKE)
Number of Hedge Fund Holders: 29
Quarterly Revenue Growth YoY as of December 30, 2022: 30.40%
ONEOK, Inc. (NYSE:OKE) was founded in 1906 and is headquartered in Tulsa, Oklahoma. The company specializes in gathering, processing, storage, and transportation of natural gas in the United States. It operates through Natural Gas Gathering and Processing, Natural Gas Liquids, and Natural Gas Pipelines segments. ONEOK, Inc. (NYSE:OKE) is one of the top high growth energy stocks to invest in, with quarterly year-over-year revenue growth of 30.4% as of December 30, 2022.
On January 10, JPMorgan analyst Jeremy Tonet upgraded ONEOK, Inc. (NYSE:OKE) to Overweight from Neutral with a price target of $75, up from $71. According to the analyst, the Bakken region is likely to perform better than other regions in the short term due to production constraints in the Permian region. Additionally, there may be concerns about the heat limit of the Northern Border Pipeline (NBPL), which could lead to forced extraction of ethane, resulting in benefits for ONEOK, Inc. (NYSE:OKE). The analyst has stated that ONEOK, Inc. (NYSE:OKE) is likely to be the main beneficiary in this scenario.
According to Insider Monkey’s Q3 data, 29 hedge funds were bullish on ONEOK, Inc. (NYSE:OKE), compared to 30 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is a prominent stakeholder of the company, with more than 1 million shares worth $52 million.
Here is what Miller Howard Investments has to say about ONEOK, Inc. (NYSE:OKE) in its Q3 2021 investor letter:
“In late August, we increased the portfolio’s cyclical exposure by trimming utilities after a period of relative outperformance and reallocating the capital to midstream energy, which had pulled back over the summer. We added ONEOK Inc. (OKE) with the expectation that it will benefit from increasing natural gas and natural gas liquids (NGL) recovery in the Bakken region.”
9. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 48
Quarterly Revenue Growth YoY as of December 30, 2022: 30.50%
Halliburton Company (NYSE:HAL) is a Texas-based provider of products and services to the energy industry worldwide. It operates in two segments, Completion and Production, and Drilling and Evaluation. On January 24, Halliburton Company (NYSE:HAL) declared a $0.16 per share quarterly dividend, a 33.3% increase from its prior dividend of $0.12. The dividend is distributable on March 29, to shareholders of record on March 1. The company’s Q4 revenue of $5.58 billion climbed 30.5% on a year-over-year basis but missed estimates by $10 million.
On January 30, HSBC analyst Abhishek Kumar raised the firm’s price target on Halliburton Company (NYSE:HAL) to $57 from $43.90 and reiterated a Buy rating on the shares. The company’s 2023 outlook looks solid with growth expected both from the U.S. and international, the analyst wrote in a research note.
Among the hedge funds tracked by Insider Monkey, Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of Halliburton Company (NYSE:HAL) as of Q3 2022, with 15.6 million shares worth $384.5 million.
Carillon Tower Advisors made the following comment about Halliburton Company (NYSE:HAL) in its Q4 2022 investor letter:
“Halliburton Company (NYSE:HAL) provides equipment and services to the global energy industry. Shares have been on an impressive trajectory recently, outpacing the notable move in the overall oilfield services and equipment group. Halliburton benefits from the ongoing upswing in global upstream spending and should play a pivotal role in helping exploration and production companies navigate the recent productivity declines in North American shale. The tight services and equipment market has resulted in strong pricing gains and margin expansion, and when coupled with a disciplined approach to capital spending, has paved the way for the stock’s outperformance.”
8. Hess Corporation (NYSE:HES)
Number of Hedge Fund Holders: 33
Quarterly Revenue Growth YoY as of December 30, 2022: 35.00%
Hess Corporation (NYSE:HES) is a New York-based exploration and production company that explores, develops, produces, purchases, transports, and sells crude oil, natural gas liquids, and natural gas. It is one of the premier high growth energy stocks to monitor. On January 25, the company reported a Q4 non-GAAP EPS of $2.03 and a revenue of $3.05 billion, outperforming Wall Street estimates by $0.39 and $220 million, respectively. In 2023, net production is forecast to be in the range of 355,000 boepd to 365,000 boepd, which is an approximate 10% increase from 2022.
According to BofA analyst Doug Leggate, Hess Corporation (NYSE:HES)’s Q4 report reveals that the investment impact of Guyana on Hess is becoming better understood, and as a result, he raised the firm’s price target on the company from $185 to $200 and maintained a Buy rating on the shares on January 26. Despite this, the analyst believes that the current share price does not accurately reflect the full value of Hess Corporation (NYSE:HES)’s portfolio.
According to Insider Monkey’s third quarter database, 33 hedge funds were long Hess Corporation (NYSE:HES), compared to 35 funds in the earlier quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is a prominent stakeholder of the company, with nearly 2 million shares worth $215 million.
7. BP p.l.c. (NYSE:BP)
Number of Hedge Fund Holders: 25
Quarterly Revenue Growth YoY as of December 30, 2022: 36.00%
BP p.l.c. (NYSE:BP) is a London-based energy company that produces and commercializes natural gas, biofuels, onshore and offshore wind power, solar power generation, and de-carbonization solutions and services. On February 7, BP p.l.c. (NYSE:BP) declared a $0.3966 per share dividend, versus a $0.36036 in November. The dividend is payable on March 31, to shareholders of record on February 17. Sales and other operating revenues of $70.36 billion climbed 36% year-over-year in the December quarter, beating Wall Street estimates by $10.39 billion. It is one of the top high growth energy stocks to monitor.
On February 9, Morgan Stanley analyst Martijn Rats raised the firm’s price target on BP p.l.c. (NYSE:BP) to 660 GBp from 636 GBp. The firm chose BP p.l.c. (NYSE:BP) as a “top pick” in the European energy major sector.
According to Insider Monkey’s third quarter database, 25 hedge funds were bullish on BP p.l.c. (NYSE:BP), compared to 27 funds in the earlier quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a significant position holder in the company, with 3.5 million shares worth $100.8 million.
6. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 74
Quarterly Revenue Growth YoY as of September 29, 2022: 38.30%
Occidental Petroleum Corporation (NYSE:OXY) was founded in 1920 and is headquartered in Houston, Texas. The company engages in the acquisition, exploration, and development of oil and gas properties in the United States, the Middle East, Africa, and Latin America. In Q3 2022, Occidental Petroleum Corporation (NYSE:OXY)’s revenue of $9.5 billion increased 38.3% on a year-over-year basis, topping analysts’ estimates by $450 million.
On February 14, Goldman Sachs analyst Neil Mehta upgraded Occidental Petroleum Corporation (NYSE:OXY) to Buy from Neutral with an $81 price target, implying 24% total return. Mehta explained in a research note that Occidental Petroleum Corporation (NYSE:OXY)’s shares have been underperforming compared to its peers in the past six months due to concerns about its capital spending levels in 2023, a volatile oil market, and uncertainty around the valuation of the Low Carbon segment. However, Goldman Sachs believes that some aspects of Occidental Petroleum Corporation (NYSE:OXY)’s business are being undervalued, such as the amount of free cash flow that can be returned to shareholders and the value of its Upstream portfolio. The analyst said that the current valuation of Occidental Petroleum Corporation (NYSE:OXY)’s stock does not accurately reflect the quality of its assets and cash flow potential.
According to Insider Monkey’s Q3 data, Warren Buffett’s Berkshire Hathaway held the leading stake in Occidental Petroleum Corporation (NYSE:OXY), comprising 194.35 million shares worth nearly $12 billion.
In addition to Cheniere Energy, Inc. (NYSE:LNG), EOG Resources, Inc. (NYSE:EOG), and Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR), elite hedge funds are piling into Occidental Petroleum Corporation (NYSE:OXY).
Here is what Smead Value Fund has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2022 investor letter:
“Our top-performing stocks in the quarter include Occidental Petroleum (NYSE:OXY). Oil and gas have been the best game in the stock market town this year and it was a pleasant surprise to see home builders pick up even with dour news on interest rates and the economy. For the first three quarters of the year, we should change the name of our fund to the Jed Clampett Fund. Occidental Petroleum (NYSE:OXY), was one of the standouts. Up through the bear market came a “bubblin’ crude!”
Click to continue reading and see 5 High Growth Energy Stocks To Buy.
Suggested articles:
Disclosure: None. 11 High Growth Energy Stocks To Buy is originally published on Insider Monkey.
