Best Energy Stocks

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The energy stocks sector is made up of companies that are highly involved in activities relating to the production, exploration, refining, or transportation of consumable fuels, such as coal, oil, and gas. These companies often engage in activities relating to constructing or providing drilling equipment or oil rigs and handling energy-related services. This sector includes some of the world’s most well-known and largest companies, such as Exxon Mobil, Marathon Petroleum, Chevron Corp., and ConocoPhillips. 

Stocks in the energy sector, which are holistically represented by the 

Vanguard Energy ETF (VDE), has broadly outperformed the market as VDE has provided investors with a return of 93.61% over the past 12 months, above the S&P 500’s total returns of 23.88%. 

Here are the top traditional stocks with the highest growth, greatest value, strongest momentum, and most searches on Google.

Quick Look at the Best Energy Stocks:

Overview

There are 2 basic categories of these stocks you can invest in — renewable and nonrenewable energy stocks. 

Companies that produce and distribute energy generated from resources of limited availability such as coal, natural gas and oil are categorized as nonrenewable energy stocks. Businesses that generate revenue from the production and distribution of energy from unlimited resources such as solar, wind and hydropower plants are considered clean or renewable energy stocks. 

Since there is tremendous demand for energy from countries all over the world, stocks from both of these energy sectors can become promising investments for you. Moreover, the recent developments in climate change and global warming may lead to a resurgence of clean energy stocks in the near future. 

Remember that energy stocks are some of the most unique on the marketplace. These businesses can grow quickly through acquisitions and mergers, or they could be acquired while you’re holding the asset. Don’t be afraid to research these assets and determine which companies are going to perform the best in the long-term and which are worth holding so that they can be cashed in during a merger or sale. At other times, you may want to exit these positions to protect yourself, depending on market conditions.

Best Online Brokers for Energy Stock

Sign up with an online broker to track and trade at your convenience. 

These platforms come equipped with a powerful stock screener for fast trading. You can apply custom filters to find stocks as per your financial goals. For instance, you could set a price range to display all the available stocks under $10 and get instant results. 

Take a look at these premier online brokers to improve your trading strategy. 

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Best For

Active and Global Traders

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get started securely through Interactive Brokers’s website

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Best For

Active and Global Traders

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Interactive Brokers is a comprehensive trading platform that gives you access to a massive range of securities at affordable prices. You can buy assets from all around the world from the comfort of your home or office with access to over 150 global markets. Options, futures, forex and fund trading are also available, and most traders won’t pay a commission on any purchase or sale.  

IBKR is geared primarily toward experienced traders and investors but now with the availability of free trades with IBKR Lite, casual traders can also acclimate to IBKR’s offerings.

Best For

• Access to international markets
• Active traders
• Detailed mobile app that makes trading simple
• Wide range of available account types and tradeable assets

Pros

• IB SmartRouting provides significant price improvement vs. industry
• Fractional trading allows investing regardless of share price
• Industry’s lowest margin rates
• Earn more by lending your fuly-paid shares

Cons

• Beginner investors might prefer a broker that offers a bit more hand-holding and educational resources

Best For

Leveraged Trading

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get started securely through Plus500’s website

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Disclosure: 82% of retail accounts lose money

Best For

Leveraged Trading

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82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Plus500 is an online CFD broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments. 

Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.

Best For

• Traders looking for a smooth mobile experience

Pros

• Great mobile app
• Low spreads and commissions
• Unlimited demo account

Cons

• Only derivatives are available
• Not open to U.S. residents

Best For

Trading Ideas

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get started securely through public.com’s website

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Trading Ideas

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Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research. 

 

Best For

• Stock and ETF investors
• Crypto investors
• Investors looking to diversify with alternative assets or bonds and options

Pros

• Commission-free stock and ETF trading
• Fractional share investing
• Advanced data, tools, and insights with Public Premium

Cons

• You can’t transfer crypto to another wallet
• No mutual funds or precious metals
• At this time, only offers individual brokerage accounts and not IRAs

Best For

Commission-Free Mobile Trading

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get started securely through Robinhood’s website

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Best For

Commission-Free Mobile Trading

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Robinhood is a popular trading platform known for its commission-free trades and user-friendly mobile app. Ideal for novice investors, Robinhood makes it easy to buy and sell stocks, ETFs and cryptocurrencies. The platform offers a straightforward, no-frills experience, making it accessible for users new to investing. With features like fractional shares and a sleek interface, Robinhood lowers the barriers to entry for investing, allowing users to start with just a few dollars. It lacks the advanced tools and research options that more experienced investors might seek. Overall, Robinhood is a great choice for beginners seeking a simple way to invest.

Best For

• Beginners looking for simplicity
• Mobile-first investors
• Commission-free trades

Pros

• User-friendly mobile app
• Instant double
• Cash management
• Access to cryptocurrencies

Cons

• Limited research tools
• No mutual funds available
• Basic customer support options

Best For

Active Short Sellers

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get started securely through TradeZero’s website

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Active Short Sellers

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TradeZero is an online broker and free stock trading platform that provides everything you need to successfully share and trade, including round-the-clock customer support. TradeZero provides four different trading state-of-the-art software programs with its services, a locator for sourcing shares for shorting, commission-free trades, and real-time streaming, to name a few of the features promoted on their website. The software is a unique and (potentially) affordable option for anyone interested in stock trading.

Best For

• Traders seeking high transparency and mobility in a stock trading program
• Those attracted to commission-free trades
• Those seeking a free version of a high-quality trading program

Pros

• 24/7 live customer support
• Uses ZeroWeb technology, a powerful level 2 online platform with direct market access
• Mobile app allows users to access stocks and trade in real-time while on the go

Cons

• Enforces Pattern Day Trading restrictions (accounts need to maintain a daily equity balance of at least $25k)
• Mobile app could offer more features

Features to Look for in Energy Stocks

• Earnings Per Share: The earnings per share (EPS) of a stock is the measure of a company’s profitability. It is calculated by dividing the net income of a company by the number of its outstanding shares. 

• Price-Earnings Ratio: The price-earnings ratio (P/E) is used to identify overpriced and undervalued stocks. The lower the P/E ratio, the more returns you are likely to make from the stock. Many stocks under $5 tend to have the lowest P/E ratios on the stock exchange. 

• Dividend Yield: Many stocks from the energy sector attract long-term traders by giving quarterly or annual dividends to its shareholders. Keep a tab on the dividend rates every quarter to assess their profit potential.  

Contribute to Cleaner Energy

Innovations from clean energy companies are making life safer and smarter. The judicious use of renewable energy is the need of the hour. And every dollar you invest in energy stocks with eco-friendly operations can prove to be precious in the future. 

Looking to learn more about investing in energy? Check out Benzinga’s guides to the best coal stocks, the best renewable energy ETFs and the best solar stocks.

Methodology

To create a specific set of companies and their respective stocks that fall under a certain criteria, we utilized a screener to examine the top stocks under each criteria. For value companies, we analyzed the companies with the lowest forward P/E, current P/E, and P/E/G multiples; for growth companies, we analyzed high earnings and revenue growth – weighing them equally; for momentum, we looked at price growth in the past 52 weeks; for trending tech, we examined the stocks with the highest percent of search increment on Benzinga.

The post Best Energy Stocks by Ryan Peterson appeared first on Benzinga. Visit Benzinga to get more great content like this.