In this article, we will discuss billionaire Ray Dalio’s top 5 energy stock picks. If you want to explore similar stocks, you can also read Billionaire Ray Dalio’s Top 10 Energy Stock Picks.
5. Cheniere Energy, Inc. (NYSE:LNG)
Bridgewater Associates’ Stake Value: $23,705,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.11%
Cheniere Energy, Inc. (NYSE:LNG) is a leading provider of liquefied natural gas (LNG) services. The company operates a world-class liquefaction facility in Sabine Pass, Louisiana, and is well-positioned to benefit from the growing global demand for LNG. As of November 11, Cheniere Energy, Inc. (NYSE:LNG) has returned 57.83% to investors year to date and is trading at a PE multiple of 16x.
On November 3, Cheniere Energy, Inc. (NYSE:LNG) posted earnings for the third quarter of fiscal 2022. The company generated a revenue of $8.85 billion for the quarter, up 176.63% year over year, and outperformed estimates by $888.89 million. As of September 30, Ray Dalio’s Bridgewater Associates has stakes worth $23.7 million in Cheniere Energy, Inc. (NYSE:LNG), and the investment accounts for 0.11% of the fund’s 13F portfolio.
Wall Street sees material upside to Cheniere Energy, Inc. (NYSE:LNG). This October, Barclays analyst Marc Solecitto raised his price target on Cheniere Energy, Inc. (NYSE:LNG) to $200 from $186 and maintained an Overweight rating on the shares. On October 19, Jefferies analyst Sam Burwell started coverage of Cheniere Energy, Inc. (NYSE:LNG) with a Buy rating and a $210 price target.
4. Cenovus Energy Inc. (NYSE:CVE)
Bridgewater Associates’ Stake Value: $32,710,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.16%
Cenovus Energy Inc. (NYSE:CVE) is a leading Canadian integrated oil company. It is engaged in the business of developing, producing and selling crude oil, natural gas, and natural gas liquids. The company is well-positioned to benefit from the continued growth of the oil and gas industry in Canada. As of September 30, Bridgewater Associates holds a position worth $32.7 million in Cenovus Energy Inc. (NYSE:CVE) and the investment covers 0.16% of the fund’s 13F portfolio.
This November, RBC Capital analyst Greg Pardy raised his price target on Cenovus Energy Inc. (NYSE:CVE) to C$32 from C$31 and maintained an Outperform rating on the shares. On November 3, Raymond James analyst George Huang raised his price target on Cenovus Energy Inc. (NYSE:CVE) to C$32 from C$30 and reiterated an Outperform rating on the shares.
On November 2, Cenovus Energy Inc. (NYSE:CVE) announced earnings for the fiscal third quarter of 2022. The company reported earnings per share of $0.53 and generated a revenue of $13.64 billion, up 25.85% year over year, beating estimates by $2.71 billion. As of November 11, the stock has gained 71.10% year to date.
Here is what L1 Capital Lhad to say about Cenovus Energy Inc. (NYSE:CVE) in its third-qaurter 2022 investor letter:
“Cenovus Energy (Long -13%) shares declined over the quarter due to an ~18% decline in oil prices on increasing fears of a U.S recession and a slowdown in global growth. Given the long-life nature of its oil sand assets and its low cost of production, we estimate Cenovus is free cash flow break-even at an oil price of ~US$40/bbl. Despite the recent fall, oil prices remain more than double this break-even point, implying considerable free cash flow generation potential for the company at current levels, with Cenovus currently trading on a consensus FY22 free cash flow yield of around 20%. There are also additional value realisation catalysts with the company continuing to progress the de-gearing of its balance sheet via organic cash generation and asset sales.”
3. ConocoPhillips (NYSE:COP)
Bridgewater Associates’ Stake Value: $44,241,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.22%
ConocoPhillips (NYSE:COP) is one of the world’s leading independent exploration and production companies, with operations in 13 countries. The company has a strong track record of delivering shareholder value through a disciplined investment strategy and a commitment to operational excellence. The company has a trailing twelve-month operating margin of 35% and an ROE of 38.75%. As of November 11, the stock is yielding 1.77% and has gained 81.59% year to date.
On November 3, ConocoPhillips (NYSE:COP) declared a quarterly cash dividend of $0.51 per common share, up 10.9% from the prior dividend of $0.46. The dividend is payable on December 1 to shareholders of record on November 15. The company also added a $20 billion share repurchase authorization to its existing share repurchase program. ConocoPhillips (NYSE:COP) has free cash flows of $18.4 billion.
As of September 30, Bridgewater Associates has stakes of $44.24 million in ConocoPhillips (NYSE:COP) and the investment covers 0.22% of Ray Dalio’s 13F portfolio. ConocoPhillips (NYSE:COP) is ranked among Ray Dalio’s top energy stock picks.
Here is what ClearBridge Investments had to say about ConocoPhillips (NYSE:COP) in its third-quarter 2022 investor letter:
“ConocoPhillips (NYSE:COP) handily outperformed the energy sector, which led the value benchmark. Its exposure to natural gas helped the stock perform more in line with natural gas E&Ps, which led the sector due to the European energy crisis and U.S. shale gas being considered a secure long-term source of liquid natural gas. In addition to COP’s low-cost resource base, conservative balance sheet and experienced management team, we appreciate its strong focus on ESG measures, which we believe is a good indicator of the quality of a company’s business model and management team.
Specifically, we appreciate solid governance practices with compensation metrics emphasizing ROCE and relative total shareholder return, the board’s effective oversight of management as well as the company’s methane flaring leadership. COP is investing in field electrification and carbon capture across its portfolio, with ambitions to deliver oil production with a CO2 intensity of sub-5 kg/BOE, which would be one of the lowest emission sources of supply in the world.”
2. Chevron Corporation (NYSE:CVX)
Bridgewater Associates’ Stake Value: $45,322,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.22%
Chevron Corporation (NYSE:CVX) is one of the world’s largest integrated oil companies, with operations in over 180 countries. The company has a long history of profitability and a strong balance sheet, with a market capitalization of over $360.5 billion, as of November 11. As of September 30, Bridgewater Associates holds a position worth $45.3 million in Chevron Corporation (NYSE:CVX), and the stock is one of Ray Dalio’s top energy stock picks.
Chevron Corporation (NYSE:CVX) has a healthy balance sheet with low debt levels and is committed to delivering shareholder value. According to the company’s balance sheet, Chevron Corporation (NYSE:CVX) has a debt-to-equity ratio of 0.149 and has free cash flows of $36.69 billion. As of November 11, Chevron Corporation (NYSE:CVX) has returned 56.35% to investors year to date and is offering a forward dividend yield of 3.05%.
On October 28, Chevron Corporation (NYSE:CVX) posted earnings for the third quarter of fiscal 2022. The company reported earnings per share of $5.56 and beat estimates by $0.64. The company generated a revenue of $66.64 billion, up 49.06% year over year, and outperformed expectations by $5.66 billion. On November 11, Piper Sandler analyst Ryan Todd raised his price target on Chevron Corporation (NYSE:CVX) to $206 from $186 and maintained an Overweight rating on the shares.
1. Exxon Mobil Corporation (NYSE:XOM)
Bridgewater Associates’ Stake Value: $99,312,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.50%
On October 28, Exxon Mobil Corporation (NYSE:XOM) posted strong earnings for the fiscal third quarter of 2022. The company reported an EPS of $4.45 and outperformed expectations by $0.64. The company’s revenue for the quarter amounted to $112.07 billion, up 51.89% year over year, and ahead of Wall Street consensus by $7.31 billion. As of November 11, Exxon Mobil Corporation (NYSE:XOM) has gained 79.34% year to date.
Exxon Mobil Corporation (NYSE:XOM) has a strong cash position. Moreover, the company is profitable and efficient at making profits for shareholders. According to the company’s balance sheet, Exxon Mobil Corporation (NYSE:XOM) has free cash flows of $59.58 billion, a trailing twelve-month operating margin of 16.07%, and an ROE of 29.73%. The company also has low debt levels and has a debt-to-equity ratio of 0.24. As of September 30, Ray Dalio’s Bridgewater Associates has a position worth $99.3 million in the company, and the investment covers 0.50% of his 13F portfolio. Exxon Mobil Corporation (NYSE:XOM) is ranked among Ray Dalio’s top energy stock picks.
Wall Street sees material upside to Exxon Mobil Corporation (NYSE:XOM). This October, Truist analyst Neal Dingmann raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $114 from $111 and maintained a Hold rating on the shares. On November 11, Piper Sandler analyst Ryan Todd raised his price target on Exxon Mobil Corporation (NYSE:XOM) to $131 from $113 and reiterated an Overweight rating on the shares.
Here is what First Eagle Investments had to say about Exxon Mobil Corporation (NYSE:XOM) in its second-quarter 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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