Top Energy Stocks

Energy Stocks With the Most Momentum
Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Texas Pacific Land Corp. (TPL) 2,090.75 16.1 101.0
Occidental Petroleum Corp. (OXY) 65.67 59.7 84.8
Marathon Petroleum Corp. (MPC) 123.23 61.5 72.3
Russell 1000 N/A N/A -13.0
Energy Select Sector SPDR ETF (XLE) N/A N/A 45.3

Source: YCharts

  • Texas Pacific Land Corp.: Texas Pacific, one of the largest landowners in Texas, is a resource management company that gets most of its revenue from oil and natural gas royalties. Texas Pacific also operates water services in the Permian Basin.
  • Occidental Petroleum Corp.: Occidental explores for and produces oil, NGLs, and natural gas. It also transports and stores oil and natural gas and manufactures basic chemicals and vinyls. The company’s latest dividend of $0.13 per share was paid Jan. 17, 2023.
  • Marathon Petroleum Corp.: See company description above.

What the Supreme Court’s EPA Ruling Means for Energy Stocks

In June 2022, the U.S. Supreme Court ruled to restrict the Environmental Protection Agency’s (EPA) ability to limit carbon emission outputs from power plants. Instead, the EPA must now gain congressional approval before enacting sweeping climate change regulations. The decision targeted the Obama administration’s Clean Power Plan (CPP), which had called for energy players to curb emissions by 32% from 2005 levels by 2030. Under the CPP, the EPA had the authority to remake the U.S. power system, shifting from fossil fuels to cleaner energy alternatives.

The ruling removes potential EPA regulatory challenges for coal, oil, and gas stocks that have already performed strongly in 2022 amid surging energy demand in the wake of the pandemic and the Russian invasion of Ukraine. However, the decision may present challenges for renewable energy stocks, many of which have struggled to gain traction despite clean energy being an integral part of Biden’s policy agenda.

It remains unclear how much long-term upside the ruling will deliver fossil fuel producers, given the clear move worldwide to renewable clean energy. Moreover, many utilities already have implemented EPA environmental regulations, especially where it has made economic sense.

Advantages of Investing in Energy Stocks

Two key reasons to invest in the energy sector are the size of the market and the sector’s recent returns.

Size of the Market: Given that the world relies on energy to power everything from cars to factories and just about all else in between, it’s not surprising that the value of the global energy market in recent years has been calculated at around $7 trillion. Furthermore, the International Energy Agency (IEA) expects global energy demand to grow by more than 30% by 2035. The energy market also offers many industries to invest in, including exploitation, storage, renewables, production, transportation, and distribution.

Recent Returns: The trend is your friend, as they say on Wall Street. No sector epitomizes this saying more than energy stocks over the past year. The group leads every other area of the market by performance, having returned nearly 30% over the past 12 months as of January 2023.

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