| Top Energy Stocks to Monitor in February 2025 | |||||
|---|---|---|---|---|---|
| Ticker | Company | Market Cap ($B) | Price ($) | 30-Day Return (%) | P/E Ratio |
| VLO | Valero Energy Corp. | 44.1 | 139.44 | 16.7 | 11.2 |
| PBF | PBF Energy Inc. | 3.4 | 29.81 | 16.5 | N/A |
| CIVI | Civitas Resources Inc. | 4.9 | 50.73 | 15.5 | 5.0 |
| VTLE | Vital Energy Inc. | 1.3 | 33.89 | 15.3 | 2.4 |
| EC | Ecopetrol S.A. | 17.6 | 8.54 | 13.2 | 4.6 |
| CTRA | Coterra Energy Inc. | 20.3 | 27.62 | 12.6 | 16.8 |
| XPRO | Expro Group Holdings N.V. | 1.5 | 13.07 | 12.1 | 97.8 |
| DVN | Devon Energy Corp. | 22.9 | 34.80 | 11.9 | 6.5 |
| NFG | National Fuel Gas Co. | 6.1 | 67.43 | 11.8 | 83.2 |
| HES | Hess Corp. | 44.6 | 144.69 | 11.5 | 16.9 |
Understanding the Energy Sector
The energy sector has displayed an upward trajectory throughout the fall of 2024, with a notable spike in stock prices following the U.S. presidential elections. Towards the end of last year, there was a slight downturn, but January 2025 saw many energy stocks rebound significantly. Typically, energy stock prices are closely correlated with the fluctuating prices of energy commodities. Notably, the onset of Russia’s invasion of Ukraine in 2022 led to a surge in energy prices, positively impacting the stocks of many companies in this sector.
Global Production Trends and Energy Stocks
Global production levels play a pivotal role in shaping the success of energy stocks. Under the current U.S. administration, oil production is projected to rise, although it has been consistently high prior to this change. Meanwhile, several OPEC+ nations have opted to limit their production, which can impact global pricing dynamics. Analysts predict that energy product demand will continue to increase, propelled by a growing reliance on high-demand services such as cloud computing and artificial intelligence.
Criteria for Selecting the Best Energy Stocks
To identify the best-performing energy stocks, we analyzed companies listed on the Nasdaq and New York Stock Exchange. Our criteria included a minimum share price of $5, a daily trading volume of at least 100,000 shares, and a market capitalization of $300 million or more. This approach ensures that we focus on established players in the energy sector, providing a reliable selection for investors.
Ranking Performance and Exclusions
After filtering through the energy companies, we evaluated them based on their 30-day return, highlighting the top performers. Stocks that reported negative returns during this timeframe were excluded from consideration. It’s important to note that some companies may not have a P/E ratio due to past losses, which can limit the assessment of their financial performance.
Pros and Cons of Investing in Energy Stocks
The energy industry represents a vast and expanding market, potentially rewarding investors. Valued at approximately $6 trillion, this sector addresses an essential demand for energy across various global operations. Investors can explore opportunities in traditional and innovative energy production, transportation, distribution, and storage, allowing for diverse portfolio options.
However, investing in energy stocks is not without challenges. Many companies are vulnerable to fluctuations in energy prices, making the market susceptible to volatility and abrupt downturns. Moreover, the energy sector’s complex nature can pose difficulties for investors attempting to pinpoint robust investment opportunities.
Climate Considerations and Future Investments
In addition to market volatility, it’s crucial to acknowledge that numerous energy firms engage in activities that may adversely affect climate change. For investors prioritizing environmental, social, and governance (ESG) standards, options within the energy sector may be limited as they seek sustainable business practices.
The Conclusion: A Caution for Investors
While the energy stocks highlighted above are noteworthy candidates for investment, past performance should not be taken as an indicator of future success. The energy sector encompasses a diverse range of companies focused on oil, renewables, and utilities, presenting a unique set of opportunities and challenges. Investors must carefully assess their risk tolerance and market dynamics when considering stocks in this volatile yet promising sector.
The opinions expressed in this article are solely for informational purposes and do not constitute financial advice. Please review our disclaimer for further details.
The author does not currently hold any of the securities mentioned in this article.