5 Best Natural Gas Stocks to Buy Now

In this article, we discuss the 5 best natural gas stocks to buy now. To read a detailed analysis of the natural gas industry, you can go directly to the 10 Best Natural Gas Stocks to Buy Now.

5. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 64

Chevron Corporation (NYSE:CVX) is an integrated oil and gas company headquartered in San Ramon, California. In the first quarter of 2023, the company produced 1.74 billion cubic feet of natural gas per day. It also started producing gas from its Western Australian project Gorgon Stage 2. Chevron Corporation (NYSE:CVX) owns 47% of the LNG project.

On May 22, Chevron Corporation (NYSE:CVX) announced its acquisition of PDC Energy, Inc. (NASDAQ:PDCE) in an all-stock deal. The company made the purchase at a 10% premium, valued at $72 per share or $6.3 billion. 

In the first quarter of 2022, Chevron Corporation (NYSE:CVX)’s shares were held by 64 hedge funds. Their total stake was valued at $23.65 billion.

The London Company made the following comment about Chevron Corporation (NYSE:CVX) in its first quarter 2023 investor letter:

“Initiated: Chevron Corporation (NYSE:CVX) – CVX is an integrated energy and chemical producer. Its upstream segment explores for, produces, processes and transfers energy products. Its downstream segment refines and markets these products in addition to industrial plastics and fuel and lubricant additives. Among the major oil companies, CVX is the most levered to oil and gas production; it has one of the most successful exploration programs and among the best production profiles. CVX also has less exposure to the downstream business, which provides an above-peer operating margin profile and supports CVX’s return on invested capital. CVX has one of the strongest balance sheets in the oil industry with net debt/EBITDA of just 0.1x. The combination of its low cost positioning and strong balance sheet gives us greater confidence in downside protection despite its ties to a volatile commodity. We’re attracted to management’s rational approach to capital allocation, with consideration for the full cycle. In terms of capital allocation, CVX just announced a $75B share repurchase plan, and it pays a healthy 3.5% dividend. We have owned CVX in the past and it is the only Energy exposure in the Large Cap portfolio.”

4. Cheniere Energy, Inc. (NYSE:LNG)

Number of Hedge Fund Holders: 67

Cheniere Energy, Inc. (NYSE:LNG) is the first American company to export liquified natural gas (LNG) and is the largest LNG company in the US. 67 hedge funds had a stake in the company in Q1 2023. Two Sigma Advisors was the most prominent hedge fund holder for the quarter with 1.2 million shares worth $190.46 million.

In the last two months, Cheniere Energy, Inc. (NYSE:LNG) signed two noteworthy deals. The first one was announced on June 21 with Equinor ASA (NYSE:EQNR). The company will purchase 1.75 million metric tonnes per annum of LNG from Cheniere Energy, Inc. (NYSE:LNG). The second deal was announced on June 26 with the China-based ENN Natural Gas Co., Ltd. The company will supply 1.8 million tonnes per annum of LNG to ENN and the deliveries will start around mid-2026.

In the last three months, 10 analysts have covered Cheniere Energy, Inc. (NYSE:LNG), and all of them maintain a Buy or Overweight rating on the stock. Their average price of $198.30 is nearly 30% higher than the stock price of $152.84 at the time of writing on June 30.

TimesSquare Capital Management made the following comment about Cheniere Energy, Inc. (NYSE:LNG) in its Q4 2022 investor letter:

“Within Energy, Cheniere Energy, Inc. (NYSE:LNG) is an energy infrastructure company that operates liquefied natural gas (LNG) terminals in Louisiana and Texas. Despite reporting inline for the latest quarter, its stock traded down -9%. Contributing factors were Europe had filled its storage ahead of the winter and a recent dip in natural gas pricing. The market for LNG is likely to remain tight for the next several years. Notably, Cheniere paid down $1.3 billion of long-term debt and repurchased $75 million of common stock during the quarter. Cheniere is well positioned to benefit from ongoing tightness in global gas markets.”

3. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 72

ConocoPhillips (NYSE:COP) is a Texas-based oil and gas exploration and production company. On April 12, the company held an analyst and investor meeting in which the management revealed its 10-year plan, according to which it will position itself for the upcoming energy transition and expand its LNG business. In the 10-year forecast, ConocoPhillips (NYSE:COP) company also plans to have $115 billion of free cash flow for distributions.

In the first quarter of 2023, 72 hedge funds held ConocoPhillips’ (NYSE:COP) shares, up from 67 in the previous quarter. Eagle Capital Management held the largest stake in the company with over 7.9 million shares worth $786.509 million.

Oakmark Global Fund made the following comment about ConocoPhillips (NYSE:COP) in its Q1 2023 investor letter:

“ConocoPhillips (NYSE:COP) is one of the largest and lowest cost U.S. exploration and production companies in the country, led by CEO Ryan Lance—in our view one of the best value creators in the industry. ConocoPhillips’s share prices fell in the first quarter as oil prices receded, which is not atypical. We were buying the company at prices where it could generate its entire market cap in free cash flow over the next decade while growing the production such that at the end of that time, the base of production would be one-third higher. This sort of reinvestment opportunity is unique to ConocoPhillips and clearly not reflected in the current share price.”

2. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 73

Exxon Mobil Corporation (NYSE:XOM) is an integrated oil and gas company headquartered in Texas. Along with conventional fuel, the company is also taking a keen interest in renewable energy. Reuters reported that Exxon Mobil Corporation (NYSE:XOM) is planning to develop over 6100 acres of lithium-rich land in Arkansas. The company is developing the project in partnership with Tetra Technologies Inc.

On June 13, Piper Sandler maintained an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) with a $127 price target, down from $145.

Exxon Mobil Corporation (NYSE:XOM)’s hedge fund sentiment dropped a little in the first quarter of 2022. The company shares were held by 73 hedge funds at a combined stake value of $4.35 billion. In the previous quarter, 79 hedge funds had a stake worth $7.1 billion.

1. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 81

Occidental Petroleum Corporation (NYSE:OXY) is an American oil and gas exploration and production company that operates in the United States, the Middle East, Canada, and Chile. In Canada and Chile, the company only operates its petrochemical manufacturing business.

In the first quarter of 2023, Occidental Petroleum Corporation (NYSE:OXY)’s shares were held by 81 hedge funds and tops the list of our best natural gas stocks to buy. Berkshire Hathaway increased its holdings in the company by 9% in Q1 and was the biggest shareholder of the company with 211.707 million shares worth $13.216 billion. On June 29, after the purchase of 2.1 million Occidental Petroleum Corporation (NYSE:OXY)’s shares, Berkshire Hathaway now owns 25% of the company.

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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