Energy comes in many forms, from fossil fuels to renewable energy. However, not all energy companies have a stellar track record. Read on to discover our picks for the top energy stocks of 2022.
The Best Energy Stocks to Buy in 2022
Oil and Gas Stocks
Chevron Corporation (NYSE: CVX)
Chevron is the third-largest energy provider in the world. The company is involved in every oil and gas industry facet, including exploration, production, refinement, transportation, and supply. It represents several product brands and also has a chemical company designing things like additives.
With such a strong business strategy, Chevron's stock continues to grow. Financial numbers look strong, with revenue up nearly 70% from last year. If that wasn't enough, Chevron pays shareholders a 3.16% dividend yield.
Exxon Mobil Corporation (NYSE: XOM)
The Exxon Mobil Corporation rose from humble beginnings as a regional kerosene marketer to the second-largest energy producer on the planet. Brought together as part of a 1999 merger, Exxon and Mobil obtain and trade crude oil and natural gas on four continents across four different brands.
Analysts believe the stock is still cheap despite a 62% increase in share price from January of this year. ExxonMobil also looks great financially, surpassing revenue expectations by nearly $7 billion. Stock owners benefit from a 3.42% dividend yield four times per year.
Cheniere Energy Inc. (NYSEAMERICAN: LNG)
Cheniere Energy sets itself apart by creating natural gas liquids. Unlike its traditional form, liquefied natural gas (LNG) takes up 600 times less space. The company buys natural gas reserves, converts it, and transports them to regional facilities.
Share prices have been climbing over the last year, likely due in part to substantial revenue numbers. The 0.90% dividend yield isn't anything to write home about but is a nice bonus nonetheless.
ConocoPhillips (NYSE: COP)
ConocoPhillips explores for and develops crude oil and natural gas on four continents and in the Asia Pacific. The company uses several unique methods to extract and refine materials and is known for low operating costs. Low costs translate to higher free cash flow that ConocoPhillips into its business and shareholders.
As growth continues, ConocoPhillips looks to pay dividends higher than ever before while reinvesting in new projects. The old and gas producer consistently boasts financial strength through favorable revenue and earnings per share numbers.
Renewable Energy Stocks
Brookfield Renewable Partners (NYSE: BEP)
As the name implies, Brookfield Renewable Partners gives its full attention to renewable energy sources. With a presence in hydro, wind, and solar, Brookfield offers a bit more diversity than pure-play energy stocks. The provider has over 150,000 employees working in 30 countries.
Brookfield also works in energy transition, helping homes and commercial buildings move away from fossil fuels toward renewable resources. The company sets up long-term fixed-rate contracts, generating a constant source of income it can use to invest back into its operations.
Share prices may be down at present, but Brookfield recently revealed a strong balance sheet to support future growth. Some of the money it brings in from long-term contracts go toward a 3.55% dividend yield.
NextEra Energy Inc. (NYSE: NEE)
NextEra Energy is an American enterprise delivering clean energy across the United States. The company’s operations cover wind, solar, nuclear, and sources of natural gas, as well as some electric vehicle mobility services.
The renewable energy giant did fail to meet revenue expectations during the first quarter this year but still has a solid financial profile moving forward. As the largest solar and wind energy producer, NextEra has a stable footing to return to growth. Although lower than other energy companies, NextEra pays out a 2.14% yield.
SunPower Corp. (NASDAQ: SPWR)
With over 35 years of experience, SunPower is the oldest solar pure-play in the United States. The company focuses on all-in-one energy solutions for homes. Packages include efficient solar panels and mountable energy storage options. SunPower's technology has earned it over 1,000 patents.
New solar panel proposals from the government look to favor solar energy sector stocks as production shifts domestic. With more and more homes shifting to solar energy, SunPower is sitting in an excellent place to succeed.
Should You Invest in Energy Stocks?
Energy companies are a considerable part of the global economy. There's an ever-increasing demand for power that will continue to be filled by these energy sector giants.
Oil prices have risen considerably since the pandemic began, significantly impacting companies focused on the asset. Renewable energy is also growing, with added incentives to homeowners and lesser costs.
Energy stocks are still a substantial investment opportunity and look to be for the foreseeable future. Even so, there are advantages and disadvantages worth considering.
Advantages of Investing in Energy Stocks
- Energy is a global necessity
- Organizations typically pay out dividends
- Energy covers a diverse range of investment opportunities
- Most companies have a large market capitalization
- Plenty of potential for long-term growth
Disadvantages of Investing in Energy Stocks
- Uncertainty surrounding oil and gas exploration
- Environmental concerns over certain types of fossil fuels
- Oil and gas prices can see a lot of volatility
The Top Energy Stocks for 2022: Final Words
Energy stocks continue to stand tall among rising inflation rates and volatility in the global economy. The companies mentioned in this article look to be a great addition to any investment portfolio as the energy demand grows. You may regret the chance to pick up some shares right now.
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Noah Zelvis is an American copywriter on a mission to help clarify the nuances of the financial world. He is on staff with The Stock Dork (https://www.thestockdork.com/), where you'll frequently see him making stock picks and evaluating services. When he's not working, you'll likely find him running or traveling.