10 Best Energy Stocks to Invest in September 2024

The global energy industry is vast. The stock market’s energy sector covers the shares of companies involved in the production and supply of energy from both fossil fuels and renewable sources. This includes everything from crude oil and natural gas to solar, wind, and nuclear power.

In this guide, we analyze the 10 best energy stocks for investors in 2024. Read on to discover which energy companies offer the greatest upside potential and the most generous dividend.

A Closer Look at the Top Energy Stocks to Buy

Read our full analysis of each energy stock in the list above.

1. ConocoPhillips – Oil Giant Boosting Production Through Acquisitions 

One of the largest global oil and natural gas companies involved in exploration and production, ConocoPhillip is present in every corner of the world, from the U.S. and Canada to Europe and the Middle East. Its stock is listed on the New York Stock Exchange with a market capitalization of $135 billion.

Like many energy stocks, Conoco is a solid dividend payer. It’s currently offering a dividend yield of about 3.8%. After the company posted fourth quarter earnings that topped Wall Street analysts’ forecasts, driven by higher production, it said it plans to return at least $9 billion to shareholders in 2024, compared with $11 billion last year.

In the quarter, oil and gas production rose 8.2% to 1.9 million barrels per day (bpd), compared with 1.76 million bpd a year earlier, helped by higher output in the U.S. Permian Basin and the purchase of an additional 50% stake from TotalEnergies in the Surmont facility in Canada.

This year the company plans to increase global production by 6% to about an estimated 1.93 million bpd. Conoco posted adjusted profit of $2.86 billion, or $2.40 per share, down from $3.38 billion, or $2.71 per share a year earlier.

2. First Solar – Solar Panel Maker Benfiting From the Clean Energy Switch  

First Solar is one of the best energy stocks to buy now from the renewables industry. This U.S.-based company specializes in solar panel manufacturing. Listed on the Nasdaq and having a market value of $17 billion, this energy stock is all about long-term growth. Its shares have grown nearly 200% on a five-year basis.

 To lay down the foundations for future growth, First Solar is building factories and pursuing acquisitions. It said it will spend to spend $1.1 bullion to build its fifth U.S. manufacturing site, where it plans to start production in 2026. Last year it purchased a Swedish maker of special solar panel elements for $80 million to expand its expertise.

For share-price growth upside, in the short term, investors are looking at First Solar’s 52-week high of $232. Based on current stock prices, this would require an upside of 46%.

Financially, for the fourth quarter it posted profit that topped analyst estimates for revenue, its full-year earnings estimate also produced a positive surprise. Net income rose to $349 million, or $3.25 per share, from $250 million, or $2.50 a share, a year earlier. For 2024 the company expects EPS of between $13 and $14. It forecasts sales of $4.4 billion to $4.6 billion, a growth of 36%, compared with the current  $4.56 billion expectation by analysts.

3. Shell – Consistent Profit Growth, Renewed Commitment to Dividends 

The Anglo-Dutch company is the world’s third most profitable oil and gas company, with trailing 12-month earnings of $47.43 billion, but its shares currently don’t reflect this success. They have gained only 2% in the past year. However, at 11 times, Shell has a competitive P/E ratio. This indicates that share-price growth has a good chance to pick up in the future. 

Share price growth was curtailed after the company trimmed its dividend in 2020, during the pandemic. That was Shell’s first dividend cut since World War II, and many income-oriented investors turned away. 

However, the oil giant has recommitted to shareholder value, and  in 2023, it returned $23 billion to shareholders in dividends and buybacks. It has recently raised its dividend by 4% to $0.688 and said it will buy back $3.5 billion of its shares in the next three months. Its dividend yield stands at 4.3%.

Fourth-quarter adjusted earnings rose 17% to $7.3 billion, reflecting gains at the operational level and strong liquified natural gas (LNG) trading results. Revenue in the quarter declined 22% to $78.7 billion. Full-year adjusted earnings dropped 29% to $28.25 billion, and revenue was down 17% at $316.62 billion. 

To prepare for the future, Shell is setting itself up as a diversified energy firm with a focus on sustainability.

4. NextEra Energy – The No.1 Power Supplier Trades at a Discount

NextEra Energy, the world’s largest power supplier by market cap, and a frontrunner in renewables in the U.S. and North America, is one of the best energy stocks to buy for value investors. Compared to its stock price 12 months ago, NextEra Energy is trading down 22%. From its record high of $88.94 at the end of 2021, it’s trading at a 36% discount. The shares have been weighed down by the company’s board trimming its dividend outlook.

Previously, the firm aimed to increase dividend payments by between 12% and 15% until at least 2026. But last year it lowered that target to 6%. In our view, the price declines might have been overdone and are not warranted by the earnings outlook. The dividend still remains at a decent level, reflected in its yield of 3.60%.

In the fourth-quarter, NextEra posted solid earnings. Adjusted net income was $1.07 billion, or $0.52 per share, compared to $1.011 billion, or $0.51 per share, in the fourth quarter a year earlier, an about 9.3% increase. This was driven by record results in its renewables and storage segment.

The company said it sees its 2024 adjusted earnings per share (EPS) in a range of between $3.23 and $3.43, and expects another 6% to 8% growth from the 2024 adjusted EPS forecast for 2025 and 2026.

5. Sinopec – Gain Exposure to the World’s Largest Energy Market 

China is the world’s largest energy consumer and owning stocks in China Petroleum & Chemical, better known as Sinopec, will give you exposure to that market. This energy giant, with a trailing 12-month revenue in 2023 of about $473 billion, engages in oil and gas exploration, refining, and marketing, as well as the production and sales of petrochemicals, chemical fibers and fertilizers. 

Sinopec has a market value of HKD 768 billion ($98 billion) and its shares are listed on the Hong Kong and Shanghai bourses. Since the beginning of the year the stock has gained 13% and as it trades at an attractive price to earnings ratio (P/E) of less than 7,  further growth could be in line.

Sinopec’s shares are further bolstered by an ongoing share buyback program and, at 8%, an above-average dividend yield. According to Morningstar analyst Chokwai Lee, Sinopec’s Hong Kong-listed H-series shares are currently trading 20% below his fair value estimate of HKD 5.60.

In the third quarter, Sinopec’s net profit rose 34% to CNY 17.86 ($2.45 billion), driven by strong sales of oil products. Revenue climbed 4.2% to CNY876.26 billion.

6. ExxonMobil – Strengthens Foothold in Shale Production With Merger

ExxonMobil is another mega-cap oil and gas producer to consider for your portfolio. Listed on the NYSE, the largest U.S. oil producer, has a market value of more than $435 billion. It has exploration locations all over the world, ranging from Qatar and the U.S. to Indonesia and Papua New Guinea.

Exxon shares have gained 7% this year helped by earnings that topped analysts forecasts and its ongoing acquisition of Pioneer Natural Resources that it aims to close later this year. Over a five-year period, the shares are up 37%. Exxon is also a solid dividend payer, with its yield currently standing at 3.5%.

Exxon said in October it agreed to buy smaller U.S. rival Pioneer Natural Resources, the largest well operator in the the Permian Basin, country’s main shale oil field, in an all-share transaction valued at close to $60 billion. The merger will create the dominant player in the Permian and increase oil and gas output at the combined company by 700,000 barrels per day to 2 million barrels per day within four years of closing the deal. 

In the final quarter of 2023, Exxon’s profit topped analysts’ expectations as better results from shale production offset the effect of weaker oil prices. Exxon had net income of $7.63 billion in the quarter, or EPS of $1.91, down 40% from the $12.75 billion, or EPS of $3.09 per share a year earlier. The result included a $2 billion impairment charge in California from regulatory issues that hit production. Adjusted for those charges, Exxon had EPS of $2.48, compared with $3.40 a year earlier.

7. Plug Power – Trending Hydrogen Stock Gets U.S. Government Grant

Plug Power is one of the best hydrogen energy stocks to consider. This U.S.-based company manufactures hydrogen fuel systems, using hydrogen and water, offering an alternative to traditional batteries. Its products are used by electric vehicle (EV) companies, so Plug Power serves a high-growth market.

In March 2024, the company received a grant from the U.S. government to help develop its technology. The U.S. Energy Department is distributing $750 million to 52 projects to reduce the cost of clean hydrogen and nurture the industry. Plug Power is the biggest single recipient, receiving three separate grants totaling $88.9 million. 

However, despite the good news and interest in the company, the shares price is struggling. The firm remains unprofitable and it has lost three-quarters of its market value over the past year to $2.5 billion, due to liquidity problem. It issued a going concern notice in November, a warning that it might not have sufficient funds to finance operations for the next 12 months.

While Plug Power has since removed the going concern notice and it’s cutting costs to turn things around, its most recent earnings don’t yet reflect these efforts. While revenue rose 27% to $891 million in 2023 from the year before, the company posted a loss of $2.30 per share, compared with a loss of $1.25 per share in 2022. The widening driven by increased investments in growth and expansion and some non-cash charges recorded in the fourth quarter, the company said. That said, analysts are optimistic. The average 12-month price estimate of 25 analysts covering the stock is $6.50, representing an 85% upside.

8. Cameco – Large Uranium Producer With 5-Year Return of 220% 

Cameco is one of the best nuclear energy stocks. Based in Canada, it’s one of the world’s largest uranium producers, and its benefitting from demand for nuclear power generation. This stock has great momentum, with Cameco up 56% over the past year.

Long-term investors have also done well, with the share price increasing by 220% in the past five years. With a market capitalization of $17 billion, there’s still plenty of room for this nuclear energy stock to grow.

Cameco also has a small dividend program in place, currently yielding just 0.22%. The key issue with this stock is that it might be on the pricey side, with has a P/E ratio of 65.

This is because Cameco’s stock price is growing significantly faster than its earnings growth. It has a robust balance sheet to help it withstand an adverse economic environment. As per its most recent annual financial statements, Cameco has total liabilities of CAD 3.84 billion ($2.84 billion), it has over CAD 9.93 billion in assets. It also posted bumper earnings for 2023, with full-year adjusted net income more than doubling to CAD 339 million from CAD 139 million in 2022. Revenue climbed to CAD 2.58 billion from CAD 1.87 billion.

9. Clearway Energy – Renewable Energy Stock With Huge Dividend Yield

Clearway Energy is a U.S.-based renewable energy company with exposure to solar and wind operations. It has over 350 renewable energy projects within its portfolio and a gross operating capacity of 9.3 GW.  Founded in 2012, it’s still in its early growth stages. Valued at $3.4 billion, its stock trades on the New York Stock Exchange and has gained more than 40% in the past five years.

The main reason to like Clearway Energy is its generous dividend program. Right now, you’ll get a dividend yield of 7.8%. That said, the stock hasn’t done so well more recently,  and it’s trading down 33% over the past 12 months.

With an average rating among Wall Street analysts of a ‘Moderate Buy’ and a 12-month target price of $28.33, which is 36% higher than its current share price, the outlook is brighter.

While the firm’s most recent quarterly earnings saw a 7% drop in revenue to $249 million, its net income more than tripled to $37 million. In terms of its balance sheet, at the end of 2023, it had assets of $14.7 billion providing coverage for liabilities of $9.71 billion.

10. Diamondback Energy – Shale Oil and Gas Producer With Solid Dividend 

Texas-based Diamondback Energy is involved in the development, exploration, and distribution of shale oil and gas. The firm is listed on the Nasdaq and has produced excellent returns recently – the stock is up by more than 20% this year, including rising to a record high $189.69.

Diamondback has added 42% to its market value over the past year, bringing it to nearly $34 billion. Its current P/E ratio of less than 11 indicates that it may be trading below its fair value and further price appreciation may follow.

Income focused investors may seek it out for its solid dividend program, with the stock currently offering a dividend yield of 4.3%.

Diamondback’s fourth quarter revenue and profit topped analyst estimates. The company saw strong revenue growth as its daily oil production volumes increased. Revenue rose 9.8% from a year earlier to $2.2 billion. Net profit was $960 million, or $5.34 a share, in the quarter, compared with $1.01 billion, or $5.62 a share, in the fourth quarter a year earlier.

eToro –  The Best Platform for Buying Energy Stocks

One of the best platforms for buying energy stocks is eToro. The platform has over 131 energy companies listed, including the top 10 covered in this guide.

Founded in 2007, eToro is one of the world’s leading investment platforms and has so far onboarded over 30 million traders across the globe. Regulated by leading bodies in the U.S., U.K., and Europe, e-Toro offers innovative social and copy-trading technologies, where new traders can copy ideas from more experienced and successful stock investors.

The platform also has an array of research and charting tools to help traders view the current market sentiment surrounding a particular energy stock.

In terms of fees, eToro has zero commissions for stock trades, so the main fee is the spread, which is the difference between the buying and selling price. For example, if you are buying some Cononco Phillips stock, the selling price is $110.88, and buying is $111.24, the difference is the spread, which eToro will take as a fee. This is cheaper than IG who charge a commission of between $3-8 per trade making eToro one of the most competitive platforms around.

eToro is one of the most trusted trading platforms and is licensed in the U.S., U.K., Australia, and Europe, making it extremely secure and ensuring traders’ funds are protected.

What Are Energy Stocks?

Energy stocks form a crucial part of the global economy. It’s a broad sector that contains many different industries. At its core, oil and gas companies represent the vast majority of the energy sector. These are companies responsible for exploring, producing, and distributing energy to the domestic and international markets.

This sector also includes renewable energy companies. These are involved in producing green and sustainable energy sources, such as wind and solar. Nuclear energy companies also play a major role in this sector.

The energy sector is cyclical. This means that when global energy prices are high, the majority of the industry performs well. And conversely, low energy prices often result in sector-wide share price declines. Therefore, investing in energy stocks is often about timing.

Another factor to consider is that energy stocks are influenced by geopolitical events. When tensions increase in key oil-producing regions, energy stocks often rise. This is because conflicts can disrupt the oil and gas supply chain, driving up global energy prices. This is why it’s important to have a firm grasp of global events when investing in energy stocks. 

Energy Companies Are Great for Dividend Income

This is one of the advantages of holding energy company shares. If your goal is to produce regular income, energy stocks are ideal. The majority of large-cap energy companies have robust balance sheets and access to plenty of cash. Not only does this enable them to pay dividends but make regular increases.

Dividend yields average about 3% in the energy industry, although some companies pay much more. For example, China Petroleum & Chemical is currently offering one of the highest with a dividend yield of about 9%. Clearway Energy is also offering a high yield at 7.48%. Diamondback Energy’s yield is 4.3%.

Another effective strategy is to look at the consistency of the dividend policy. ExxonMobil is a Dividend Aristocat – it has increased its quarterly dividend each year for four decades.

Track the Broader Energy Sector Through Specialist Funds 

There are hundreds of companies operating in the energy sector, and choosing the best energy stocks to buy can be daunting. If you’re a beginner, you might consider a diversified fund that tracks lots of different energy stocks. This way you can gain exposure to the best energy stocks without actively managing your money.

For example, the Energy Select Sector SPDR Fund is a popular option to consider. Incepted in 1988, this energy fund has an expense ratio of just 0.1% per year. Since its inception, it has produced average annualized returns of 8.25%.

Oil Prices Have a Direct Impact on Energy Stock Profitability 

There is a direct correlation between global energy prices and energy stock valuations. This is especially the case with energy companies that explore and produce crude oil.

After all, when oil prices are high, this means that energy companies have higher profit margins. This is the same as banks making more money when interest rates are high. Therefore, you can make investment decisions based on global energy prices. Right now, crude trades in the $80-$85 region. However, with the Israel – Hamas war going on, they could come under upward pressure.

However, high oil prices are a double-edged sword for some segments of the energy sector. For example, renewable energy companies often struggle when prices are high. This is because operational costs soar, especially when producing wind and solar equipment.

To gauge where oil prices might be headed, you’ll need to keep tabs on OPEC (Organization of the Petroleum Exporting Countries) meetings to assess supply and demand targets. You’ll also need to analyze fundamental data, such as earnings reports and balance sheets. After all, just because oil and gas prices are high, this doesn’t mean your chosen energy stocks will perform well.

Fortunately, OPEC meetings are public. You can stream them live from the OPEC website. This will enable you to make investment decisions based on the outcome of each meeting.

Another good resource to use when you want to see what is in store for oil prices is the International Energy Agency (IEA)’s monthly oil market report, which is one of the world’s most authoritative and widely watched sources of data and insights on crude demand and supply. You can access analysis on other energy markets on the IAE’s website, as well.

Where to Get Energy Stock Tips and Insights

eToro leverages a multifaceted approach to providing data which users can use for insight and analysis.  Here’s how it works –

Market Analysis: eToro’s research team analyze historical price movements, industry trends and global demand to identify potential opportunities.

Social Sentiment: eToro taps into social media discussions to gauge investor sentiment towards specific energy companies and sectors (renewables, oil & gas etc).

Technical Indicators: Technical analysis tools like charts and indicators help users identify entry and exist points for energy stock positions.

On-Platform Insights: eToro curates analyst ratings, news feeds and popular investor positions within the energy sector, offering valuable perspectives.

Through a combination of these data streams, eToro empowers users to make informed decisions that can be implemented in the dynamic energy stock market.

Conclusion

We’ve discussed the best energy stocks to buy, especially at times of rising global oil and gas prices. We’ve also considered stocks from alternative energy sources, such as solar, wind, nuclear, and hydrogen.

To conclude, we found that eToro offers a complete package for those looking to incorporate data and AI stock picks into their investment strategies.

References

• https://www.conocophillips.com/sustainability/managing-climate-related-risks/strategy/scenario-analysis/
• https://www.morningstar.com/stocks/xhkg/00386/quote
• https://www.reuters.com/markets/deals/exxon-talks-pay-over-250-per-share-pioneer-bloomberg-news-2023-10-11/
• https://www.reuters.com/world/us/biden-administration-announce-hydrogen-hub-grants-friday-sources-2023-10-10/
• https://www.reuters.com/business/energy/shale-producer-diamondback-misses-profit-estimates-lower-oil-prices-2023-05-01/
• https://www.wsj.com/market-data/quotes/MRO/research-ratings
• https://www.opec.org/opec_web/en/311.htm
• https://www.bloomberg.com/news/articles/2023-10-10/biden-to-award-7-billion-for-hydrogen-hubs-across-the-nation
• https://edition.cnn.com/2023/10/08/middleeast/israel-gaza-attack-hostages-response-intl-hnk/index.html
• https://investor.firstsolar.com/financials/quarterly-results/default.aspx
• https://www.finra.org/investors/insights/market-cap
• https://www.ssga.com/us/en/intermediary/etfs/funds/the-energy-select-sector-spdr-fund-xle
• https://www.cnbc.com/2023/03/13/chatgpt-and-generative-ai-are-booming-but-at-a-very-expensive-price.html

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