In this article, we discuss the 11 safe energy stocks for a retirement stock portfolio. If you want to read about some more energy stocks, go directly to Retirement Stock Portfolio: 5 Safe Energy Stocks to Consider.
The energy sector has been one of the best performers in the S&P 500 over the past few decades despite the volatility seen in energy prices in recent years. In the last few months, the energy sector, amid a slowing macro environment, has outperformed the broader market as investors shift away from riskier sectors like tech towards safer havens in energy. Some of the top energy stocks in this context include Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron Corporation (NYSE:CVX).
The energy industry is expected to continue on a growth path in the coming years as innovations within the sector, with the rise of renewables and alternative sources, as well as government spending stimulate business. This makes the industry a top investment pick for a retirement stock portfolio. Per estimates by S&P Global, US spending on upgrading and modernizing energy and water infrastructure will reach $63 billion in 2022. Investors who are eager to capitalize on these growth trends should invest in energy stocks for maximum reward.
Our Methodology
The companies that operate in the energy sector and have established business models that have demonstrated historical resilience against inflationary headwinds were selected for the list. Many of these stocks are solid dividend payers, which make them ideal for a retirement portfolio.
Retirement Stock Portfolio: Safe Energy Stocks to Consider
11. Brookfield Renewable Partners L.P. (NYSE:BEP)
Number of Hedge Fund Holders: 19
Brookfield Renewable Partners L.P. (NYSE:BEP) owns a portfolio of renewable power generating facilities primarily in North America, Colombia, Brazil, Europe, India, and China. It is one of the best safe energy stocks for a retirement stock portfolio. On October 11, Brookfield Business Partners, with its institutional partners, agreed to sell Westinghouse Electric Co, which is its nuclear technology services operation, to an investor group led by Cameco and Brookfield Renewable Partners for $8 billion.
On October 18, TD Securities analyst Sean Steuart resumed coverage of Brookfield Renewable Partners L.P. (NYSE:BEP) stock with a Buy rating and $41 price target, highlighting that the partnership with Cameco to acquire Westinghouse Electric expands the firm more aggressively into broader energy transition segments.
At the end of the third quarter of 2022, 19 hedge funds in the database of Insider Monkey held stakes worth $161 million in Brookfield Renewable Partners L.P. (NYSE:BEP), compared to 19 in the preceding quarter worth $236 million.
Just like Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron Corporation (NYSE:CVX), Brookfield Renewable Partners L.P. (NYSE:BEP) is one of the best safe energy stocks for a retirement stock portfolio.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Brookfield Renewable Partners L.P. (NYSE:BEP) was one of them. Here is what the fund said:
“Brookfield Renewable Partners L.P. (NYSE:BEP) is a pure-play renewables operator and developer headquartered in Canada, focused on international hydro, solar, wind and storage technology. As more private and public institutions announce ambitious carbon reduction initiatives, Brookfield Renewable’s globally diversified, multi-technology renewables business makes it an attractive partner. Brookfield’s development pipeline stands at 18,000 MWs, providing confidence that the company can meet its targeted double-digit cash flow growth through 2025. The market narrative around the energy transition and energy security, along with increasing fossil fuels prices which have driven greater focus on switching to renewables, helped Brookfield shares in the quarter.”
10. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 32
Plug Power Inc. (NASDAQ:PLUG) delivers end-to-end clean hydrogen and zero-emissions fuel cell solutions for various sectors. It is one of the top safe energy stocks for a retirement stock portfolio. On September 8, Plug Power said that it has secured its largest multi-site electrolyzer order in Europe. Lhyfe, a hydrogen production company, listed at Euronext in Paris, placed an order for ten 5MW PEM electrolyzer systems for production of green hydrogen across multiple plants in Europe.
On October 21, Canaccord analyst George Gianarikas assumed coverage of Plug Power Inc. (NASDAQ:PLUG) stock with a Hold rating with a price target of $16, down from $21, noting that the company was ramping up green hydrogen production, which offers both high margins and high growth over time.
At the end of the third quarter of 2022, 32 hedge funds in the database of Insider Monkey held stakes worth $373.5 million in Plug Power Inc. (NASDAQ:PLUG), compared to 26 in the preceding quarter worth $258.9 million.
9. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 44
SolarEdge Technologies, Inc. (NASDAQ:SEDG) designs, develops and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations worldwide. It is one of the premier safe energy stocks for a retirement stock portfolio. On October 28, SolarEdge announced the Australian launch of a DC optimized smart energy ecosystem that promises to get the most from solar and battery systems, both on energy cost savings and energy security.
On October 25, B. Riley analyst Christopher Souther maintained a Buy rating on SolarEdge Technologies, Inc. (NASDAQ:SEDG) stock and lowered the price target to $377 from $385, noting the reduced gross margin estimates for fourth quarter and early 2023 reflect expectations caused by the impact from currency headwinds that will take another two quarters or so to play out.
At the end of the third quarter of 2022, 44 hedge funds in the database of Insider Monkey held stakes worth $673.8 million in SolarEdge Technologies, Inc. (NASDAQ:SEDG), compared to 40 in the previous quarter worth $749.4 million.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and SolarEdge Technologies, Inc. (NASDAQ:SEDG) was one of them. Here is what the fund said:
“We are well-positioned to participate in the accelerating energy transition. High and rising utility costs combined with policy support are driving increased penetration of home solar plus storage systems in Europe. Israel-based SolarEdge Technologies (NASDAQ:SEDG) expects to see significant growth in solar installations in this market led by Germany and Italy, among others, where consumers are not only demanding solar on the roof but a complete system solution including batteries. This phenomenon is accelerating revenue growth for these companies.”
8. First Solar, Inc. (NASDAQ:FSLR)
Number of Hedge Fund Holders: 45
First Solar, Inc. (NASDAQ:FSLR) provides global photovoltaic (PV) solar energy solutions. It is one of the prominent safe energy stocks for a retirement stock portfolio. On October 26, First Solar said that it has signed a supply agreement with Swift Current, a city of Canada, for thin film solar modules. First Solar will supply Swift Current with 2GW high performance and responsibly produced thin film solar modules in 2025 and 2026.
On November 7, KeyBanc analyst Sophie Karp maintained an Overweight rating on First Solar, Inc. (NASDAQ:FSLR) stock and raised the price target to $175 from $145, noting that the updated estimates fully reflect the impact of AMC on the company’s earnings in 2023.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in First Solar, Inc. (NASDAQ:FSLR) with 3.2 million shares worth more than $426 million.
7. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an independent energy company that primarily engages in the exploration, development, and production of oil, natural gas, and natural gas liquids. It is one of the elite safe energy stocks for a retirement stock portfolio. On November 1, Devon Energy posted earnings for the third quarter of 2022, reporting earnings per share of $2.18, beating market estimates by $0.05. The revenue over the period was $5.43 billion, up 56.5% compared to the revenue over the same period last year and beating market estimates by $640 million.
On October 18, Piper Sandler analyst Mark Lear raised the target on Devon Energy Corporation (NYSE:DVN) stock to $96 from $94 and kept an Overweight rating, noting that exploration and productions were back on solid footing heading into the third quarter results after a volatile September due to OPEC and supply cut issues.
At the end of the third quarter of 2022, 51 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Devon Energy Corporation (NYSE:DVN), compared to 57 in the previous quarter worth $1.5 billion.
In its Q2 2022 investor letter, GoodHeaven Capital Management, an asset management firm, highlighted a few stocks and Devon Energy Corporation (NYSE:DVN) was one of them. Here is what the fund said:
“Our biggest dollar gainer within this period was Devon Energy Corporation (NYSE:DVN), a position which emanated from a takeover in early 2021 of our long-time holding WPX Energy. We are sitting on a material (unrealized) gain from our cost and are now receiving material dividends thanks to Devon’s thoughtful fixed/variable dividend policy. Energy is now a hot sector for investors but we have had material exposure for a long time. We remember a bit too well $40 oil, NEGATIVELY PRICED front-month oil contract, and what it’s like to own a company with leverage and negative free cash flow during such periods. Our desire to have our biggest portfolio exposures be high-return, growing, reasonably predictable and moderately levered companies lead us to reduce our Devon exposure in the past. When the recent facts and circumstances for the industry changed and appeared supportive of healthy oil prices, we decided to maintain a sizable holding and more recently added to the position. At Devon’s Q1 dividend rate, which is most variable in nature, the shares now yield approximately 10% and our yield on our average cost is materially higher. In addition, we maintain additional energy exposure through our long-term (and successful) holding in Hess Midstream and less directly through TerraVest and Berkshire Hathaway’s energy investments.”
6. EOG Resources, Inc. (NYSE:EOG)
Number of Hedge Fund Holders: 52
EOG Resources, Inc. (NYSE:EOG) explores, develops, produces, and markets crude oil, natural gas and natural gas liquids. It is one of the major safe energy stocks for a retirement stock portfolio. On November 3, EOG Resources posted earnings for the third quarter of 2022, reporting earnings per share of $3.71, $0.50 less than the estimates of $4.21. The revenue over the period was $7.59 billion, compared to the consensus estimates of $6.62 billion.
On November 7, Susquehanna analyst Biju Perincheril maintained a Positive rating on EOG Resources, Inc. (NYSE:EOG) stock and raised the price target to $172 from $162, noting that the company reported solid third quarter results, beating both EPS and production expectations.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in EOG Resources, Inc. (NYSE:EOG) with 7.1 million shares worth more than $787.4 million.
Alongside Exxon Mobil Corporation (NYSE:XOM), ConocoPhillips (NYSE:COP), and Chevron Corporation (NYSE:CVX), EOG Resources, Inc. (NYSE:EOG) is one of the best safe energy stocks for a retirement stock portfolio.
In its Q1 2022 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and EOG Resources, Inc. (NYSE:EOG) was one of them. Here is what the fund said:
“EOG Resources (NYSE:EOG) (+36%), was among our top contributors in the quarter as oil prices rallied due to tight supplies, which were then exacerbated by the Russian invasion of Ukraine. Although their share prices have increased considerably, both companies still look quite undervalued even using longer-term oil prices in the $65-70 dollar range. Meanwhile, if times are good over the next couple of years, we expect these companies to return significant percentages of their market caps to shareholders.”
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Disclosure. None. Retirement Stock Portfolio: 11 Safe Energy Stocks to Consider is originally published on Insider Monkey.