After a shaky start this year, energy stocks seemed to have lost their sheen in stark contrast to last year. The early disappointments led many to believe these stocks would lose momentum. However, as the saying goes, “The night is darkest just before the dawn.” The top energy stocks are finding their stride again, surging back into the spotlight.
One can’t overlook pivotal moves, such as Saudi Arabia’s massive output reductions, combined with a summer travel spike, which should drive up the demand for crude oil. With West Texas Intermediate (WTI) crude oil prices climbing by double-digit margins since June, the best energy stocks might be gearing up for a stellar showing ahead. Additionally, with renewables eternally in vogue, the allure of energy stocks at this time becomes even more compelling for investors.
Equinor ASA (EQNR)
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In an environment filled with uncertainties and market tremors, Equinor ASA (NYSE:EQNR) has proven to be incredibly resilient in the energy domain. This oil, gas and renewables giant, notwithstanding challenges, reported impressive adjusted earnings of $7.54 billion in the second quarter, underscoring its mettle. Although free cash flow was down over the past 12 months, it grew 43.8% per share over the past five years.
More importantly, for investors, Equinor has maintained its regular dividend since 2010, upping the payout to 60 cents just three months ago, signaling its commitment to return a whopping $17 billion to its shareholders within the year.
Moreover, from ramping up capacity at the Johan Sverdrup Oil Field to the game-changing acquisition of Rio Energy, the company is paving pathways for long-term growth ahead. Additionally, Equinor inked a pivotal deal with Cheniere Energy (NYSEAMERICAN:LNG), a prominent liquefied natural gas supplier. This 15-year pact, commencing in 2026, entails procuring around 1.75 million tons of LNG annually, empowering Equinor to double its exports from Cheniere’s U.S. Gulf Coast terminals.
Clearway Energy (CWEN)
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Despite being a top player in the clean energy realm, Clearway Energy (NYSE:CWEN) finds itself at the receiving end of market skepticism. The stock is down more than 23% in the past six months, yet the narrative beneath this stock’s movement paints a more promising picture ahead.
Having honed a sharp acumen for cash flow expansion, Clearway is consistently amplifying its distributions. This past May heralded a critical milestone in Clearway’s development, with the company bolstering its payout for the 12th successive quarter, setting it at 38 cents. Furthermore, this renewable energy trailblazer forecasts robust annual dividend growth between 5% and 8%. It yields an amazing 6.3%, with three consecutive years of payout growth.
Diving deeper, Clearway Energy Group showcases an impressive pipeline of renewable ventures awaiting fruition. Additionally, a major move by global energy titan TotalEnergies (NYSE:TTE), acquiring a whopping 50% stake in its parent company, is poised to shine bright in the renewable energy sphere.
Enbridge (NYSE:ENB) is a distinguished forerunner in energy transportation and distribution, with its expansive pipelines and infrastructural matrix facilitating the streamlined distribution of crude oil, natural gas and other natural gas liquids.
Dive into the numbers from the second quarter, and the story is clear. Enbridge’s GAAP earnings rocketed to $1.8 billion or 91 cents a share, underscoring a commendable bump on a year-on-year basis. With adjusted earnings blowing past the $1.4 billion mark and a robust adjusted EBITDA, it’s evident that Enbridge is executing brilliantly.
Furthermore, Enbridge’s ambitious blueprint for the Rio Bravo Pipeline’s inaugural phase is incredibly encouraging. Designed to channel a whopping 2.6 billion cubic feet of natural gas daily, the venture can effectively bolster the Rio Grande LNG project, foreshadowing promising revenue streams over the long run. Couple this with Enbridge’s historic tenacity, savvy debt strategies and unwavering commitment to natural gas, and you’ve got an investment haven poised for long-term gains.
On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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