In this article, we will discuss the 5 best fuel stocks to buy now. To read the detailed analysis and recent updates on the energy industry, go directly to the 10 Best Fuel Stocks to Buy Now.
5. EQT Corporation (NYSE:EQT)
Number of Hedge Fund Holders: 56
TTM PE ratio as of April 22: 7.47
EQT Corporation (NYSE:EQT) is an American oil and gas exploration and production company. As of December 2022, the company had proved reserves of 25 billion cubic feet of gas equivalent. Close to 90% of the company’s proven reserves are in Marcellus Formation, most of which is natural gas. It is one of the best energy stocks to invest in according to hedge funds.
On April 19, EQT Corporation (NYSE:EQT) declared a 15-cent quarterly dividend, which is in line with its previous one. The dividend is payable by June 1 to the shareholders of record on May 10. The company has a dividend yield of 1.84 as of April 22.
In the last three months, 18 Wall Street analysts have covered EQT Corporation (NYSE:EQT) and 13 of them keep a Buy rating while 5 of them maintain a Hold rating. The average analyst price target for the company stock stands at around $43.89, representing a 34.6% upside from the stock price of $32.59 at the time of market closing on April 22.
Artisan Partners made the following comment about EQT Corporation (NYSE:EQT) in its Q4 2022 investor letter:
“Finally, shares of US natural gas producer EQT Corporation (NYSE:EQT) fell on lower-than-expected production due to extreme weather in December. However, the company still produced strong free cash flow that beat expectations. EQT is one of the largest producers of natural gas, an energy source that emits significantly less carbon dioxide than other fossil fuels, such as coal or oil. We sold the position, as it had reached its target valuation.
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Follow Eqt Corp (NYSE:EQT)
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 57
TTM PE ratio as of April 22: 9.25
Chevron Corporation (NYSE:CVX) is an American energy company with significant operations in oil and gas. The company is also focused on renewable energy sources. The company got involved in renewable fuel development in 2007 with the collaboration of the National Renewable Energy Laboratory to generate algae fuel. Furthermore, on June 13, 2022, Chevron Corporation (NYSE:CVX) completed the acquisition of Renewable Energy Group, Inc. to further enhance its renewable energy portfolio.
Chevron Corporation (NYSE:CVX) has recently announced the expansion of its natural gas production to meet the demand in the US and Europe. On April 18, the company issued a lease tender for a drill ship in 2024 for one year as per a Reuters report. Chevron Corporation (NYSE:CVX) is looking to explore natural gas in Cyprus, Egypt, and Israel.
In the fourth quarter of 2022, 57 hedge funds held a stake in Chevron Corporation (NYSE:CVX) and Berkshire Hathaway was the most significant hedge fund holder with nearly 163 million shares worth $29.25 billion.
Carillon Tower Advisers made the following comment about Chevron Corporation (NYSE:CVX) in its Q4 2022 investor letter:
“Energy performed well during the fourth quarter, with the sector up about 23%. Investors returned to the sector after the Organization of the Petroleum Exporting Countries (OPEC) signaled it would reduce production. Chevron Corporation (NYSE:CVX) reported strong quarterly results while buying back stock, paying a healthy dividend, and maintaining a strong balance sheet.”
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Follow Chevron Corp (NYSE:CVX)
3. Chesapeake Energy Corporation (NASDAQ:CHK)
Number of Hedge Fund Holders: 58
TTM PE ratio as of April 22: 2.42
Chesapeake Energy Corporation (NASDAQ:CHK) is an American energy company with reserves in Marcellus Shale and Haynesville/Bossier Shales. Most of the company’s reserves are of natural gas followed by petroleum and natural gas liquids.
Chesapeake Energy Corporation (NASDAQ:CHK) is one of the best energy stocks as Fitch Ratings upgraded the company’s long-term credit rating to BB+ from BB. S&P Global Ratings still maintains the company’s credit rating of BB but with a “stable” outlook.
On April 18, UBS analyst Josh Silverstein assumed Chesapeake Energy Corporation (NASDAQ:CHK)’s coverage with a Buy rating and price target of $101. The analyst looks at the company’s Eagle Ford assets’ divestitures in a positive light and expects a better cash flow yield in the next couple of years.
Carillon Tower Advisers made the following comment about Chesapeake Energy Corporation (NASDAQ:CHK) in its Q3 2022 investor letter:
“Chesapeake Energy Corporation (NASDAQ:CHK), a natural gas exploration and production company, emerged from bankruptcy with little fanfare in 2021, despite having rid itself of its debt burden and onerous pipeline contracts. The company was able to make two large acquisitions at very reasonable prices within its core producing areas, allowing for scale and cost savings. Then in 2022, natural gas prices began to rise well above expectations, increasing the value of Chesapeake’s large natural gas resources and production and contributing to its outperformance.”
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Follow Chesapeake Energy Corp (NYSE:CHK)
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 71
TTM PE ratio as of April 22: 4.99
Occidental Petroleum Corporation (NYSE:OXY) is a Texas-based hydrocarbon exploration company. The company also manufactures petrochemicals and has operations in renewable energy through carbon capture.
Occidental Petroleum Corporation (NYSE:OXY) owns around 2500 miles of CO2 pipelines in the US and has around 14 recovery plants. The company is also building a plant to remove CO2 directly from the air to sell as carbon credits to other companies.
In the last three months, 10 out of 18 Wall Street analysts keep a Buy rating on Occidental Petroleum Corporation (NYSE:OXY) with an average price target of $72.44. The company is on our list of best energy stocks as it has a TTM PE ratio of 4.99 as of April 22.
Here is what Smead Capital Management had to say about Occidental Petroleum Corporation in its Q3 2022 investor letter:
“Our top-performing stocks in the quarter includes 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!”
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Follow Occidental Petroleum Corp (NYSE:OXY)
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 79
TTM PE ratio as of April 22: 8.75
Exxon Mobil Corporation (NYSE:XOM) is an American multinational integrated oil and gas company. The company has also started to make investments toward the low carbon future and plans to invest $15 billion toward it. Additionally, in January 2022, the company acquired a 49.9% stake in the Norwegian biofuels company, Biojet AS.
Along with being one of the best energy stocks, Exxon Mobil Corporation (NYSE:XOM) is also one of the best dividend stocks to buy and hold according to our research. The company has increased its dividends for the past 4 decades and has a dividend yield of 3.07% at the time of writing.
On April 18, UBS upgraded Exxon Mobil Corporation (NYSE:XOM) stock from Neutral to Buy and raised the price target to $144 from $125. The firm believes that the company is well-positioned to take advantage of the current upcycle. Moreover, Exxon Mobil Corporation (NYSE:XOM) is also set to give out better shareholder returns in the future.
Here’s what First Eagle Investments said about Exxon Mobil Corporation (NYSE:XOM) in its Q2 2022 investor letter:
“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
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Follow Exxon Mobil Corp (NYSE:XOM)
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