Top Energy Stocks for June 2023

Jan 18, 2024

SOIL.V, VTNR, and SCL.TO are top for value, growth, and momentum, respectively

Thatree Thitivongvaroon / Getty Images

Top energy stocks for June include Shawcor Ltd., YPF SA, and TORM PLC, which have climbed by as much as 147% in the past year at the same time that the broader energy sector has underperformed the market.

The energy sector, as represented by the benchmark Energy Select Sector SPDR ETF (XLE), has fallen about 12% in the last 12 months, while the Russell 1000 Index is up close to 3%.

We look below at top energy stocks in three categories: best value, fastest growth, and most momentum. Benchmark figures above are as of June 1, 2023, while all data below is as of May 30.

These are the energy stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. A low P/E ratio shows that you’re paying less for each dollar of profit generated. Profit can be returned to shareholders in the form of dividends and share buybacks.

Source: YCharts

These are the top energy stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.

Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax laws or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.

Source: YCharts

These are the energy stocks that had the highest total return over the past 12 months.

Source: YCharts

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 everything in between, it's not surprising that the value of the global energy market in recent years has been calculated at around $6 trillion. The energy market also offers many subindustries to invest in, including exploration, storage, renewables, production, transportation, and distribution.

Growth potential: The United Nations (UN) estimates the world needs to invest $2.4 trillion a year through 2035 in energy systems to achieve the Paris Climate Agreement goals. The global transition to renewable energy from fossil fuels presents investors with an opportunity to invest in upstart energy companies pursuing share in a huge market.

Energy stocks also come with potential downsides. Two industrywide risks to consider are:

Shift away from fossil fuels: Climate change awareness and an increased focus on environmental, social, and governance (ESG) investing practices could threaten the viability of traditional energy companies over the longer term. The U.S. Environmental Protection Agency (EPA) says that climate change could contribute to strains on the energy system, challenges with energy distribution, and disruptions to the overall energy industry, among other challenges.

Environmental accidents: Occasionally, energy companies may experience high-profile environmental accidents. These not only are damaging from a public relations perspective but can hobble business and company finances as well. The April 2010 Deepwater Horizon oil well explosion and spill led BP PLC (BP) to pay billions in settlements and penalties in subsequent years.

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As of the date this article was written, the author does not own any of the above stocks.

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Obsidian Energy. "Obsidian Energy Announces Fourth-Quarter and Full Year 2022 Results."

Southwestern Energy Co. "Southwestern Energy Announces $1 Billion Share Repurchase Program."

Southwestern Energy Co. "Southwestern Energy Announces First-Quarter 2023 Results."

Vertex Energy Inc. "Vertex Energy Announces First-Quarter 2023 Results."

Energy Fuels Inc. "Energy Fuels Announces Q1-2023 Results, Including Net Income of $114.26 million, $143.61 million of Working Capital, $19.34 million of Uranium and Vanadium sales and Commencement of Development of Rare Earth Separation Capabilities in Utah."

Black Stone Minerals LP. "Black Stone Minerals, L.P. Reports First-Quarter Results."

Yahoo! Finance. "Stocks in Play: Shawcor Ltd."

YPF SA. "2022 & Q422 Consolidated Results."

TORM. "Seriously Good Shipping."

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Bloomberg. "BP Is Still Paying for the Deepwater Horizon Spill."

Environmental Protection Agency. "Deepwater Horizon – BP Gulf of Mexico Oil Spill."