Unraveling 15 of the Best Natural Gas Stocks: A Canada-USA Showdown!
Investing in the best natural gas stocks can be a lucrative opportunity for investors looking to diversify their portfolios and capitalize on the growing demand for energy. Natural gas stocks represent shares of companies involved in the exploration, production, refining, and distribution of natural gas, a crucial component of the global energy mix.
Understanding the basics of natural gas stock investing
Investing in natural gas stocks requires a basic understanding of the energy sector and the dynamics of the natural gas market. It’s important to assess the financial health of the companies, their cash flow, and their ability to generate consistent profits.
How does natural gas stock perform compared to other energy stocks?
Natural gas stocks have the potential to perform well compared to other energy stocks. The demand for natural gas is expected to increase in the coming years due to its lower carbon emissions compared to other fossil fuels. This could drive the growth of natural gas stocks in the long term.
What factors influence natural gas stock prices?
Natural gas stock prices are influenced by various factors, including the supply and demand dynamics of the natural gas market, geopolitical events, government regulations, and the overall performance of the energy sector. Investors should closely monitor these factors to make informed investment decisions. Additionally, weather patterns can also significantly impact natural gas stock prices.
Cold weather increases the demand for natural gas as it is often used for heating, leading to higher prices. Conversely, warm weather reduces the demand for natural gas and can result in lower prices and it might be a better time to buy the best natural gas stocks.
Furthermore, technological advancements in natural gas extraction techniques, can also impact stock prices. If new and more efficient extraction methods are developed, it can lead to increased supply and potentially lower prices. On the other hand, if there are limitations or restrictions placed on these extraction techniques, it can limit supply and drive prices higher.
Changes in global energy policies and environmental concerns can also affect natural gas stock prices. Governments may introduce incentives or regulations to promote the use of natural gas as a cleaner alternative to other fossil fuels, which can drive up demand and prices. Conversely, increased focus on renewable energy sources or stricter environmental regulations can reduce demand for natural gas and impact stock prices negatively.
Lastly, geopolitical events, such as conflicts or disruptions in major natural gas-producing regions, can significantly affect stock prices. For example, the Russia-Ukraine conflict has a significant impact on natural gas prices primarily due to Russia’s role as a key energy supplier, especially to Europe.
Why should investors consider investing in natural gas stocks?
Investors should consider investing in natural gas stocks for several reasons. Firstly, natural gas is expected to play a significant role in the future energy transition towards cleaner and renewable sources. This presents an opportunity for long-term growth in the natural gas sector.
Exploring the potential growth of natural gas as an energy source
Natural gas is considered a cleaner-burning fuel compared to coal and oil, making it a more environmentally friendly choice. As countries worldwide shift their focus towards renewable energy, natural gas has the potential to bridge the gap and serve as a transition fuel.
How can natural gas stocks provide stable dividend yields?
Many natural gas companies have a history of providing stable dividend yields to their shareholders. These dividends can be a reliable source of income for investors, especially in times of economic uncertainty.
What are the advantages of natural gas stocks over other energy sectors?
Natural gas stocks offer several advantages over other energy sectors. They tend to have lower volatility compared to oil stocks, making them a more stable investment option. Additionally, the demand for natural gas is less susceptible to geopolitical tensions, unlike oil stocks that can be heavily influenced by global events.
What are the key factors to consider when evaluating natural gas stocks?
When evaluating natural gas stocks, it is essential to consider certain key factors that can impact their performance and profitability.
Analyzing the financial performance of natural gas companies
Investors should analyze the financial health of natural gas companies by examining their balance sheets, revenue growth, and cash flow. Companies with strong financials are likely to be more resilient to market fluctuations and better positioned for long-term success.
How do natural gas prices affect the profitability of these stocks?
The price of natural gas plays a significant role in the profitability of natural gas stocks. Fluctuations in natural gas prices can impact the revenue and earnings of companies operating in the sector. Therefore, it is crucial to keep a close watch on natural gas price trends.
Understanding the impact of government regulations on natural gas stocks
Government regulations and policies can have a significant impact on the natural gas industry. Investors should consider the potential effects of regulatory changes on the operations and profitability of natural gas companies before making investment decisions.
The Best Natural Gas Stocks to Buy Now
There are several Canadian and USA natural gas stocks that are worth considering for investment.
USA Natural Gas Stocks List
When it comes to USA natural gas stocks, companies like ExxonMobil and Chevron are among the top choices. These energy giants have a significant presence in the natural gas industry and have a proven track record of delivering shareholder value.
Chesapeake Energy Corp. (CHK-N)
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research CHK's growth is expected to slow, so on a forward basis its P/E is 22X. EPS in 2023 will be less than half 2022's level. 25% growth though is expected in 2024. The balance sheet is very strong. The dividend varies, and was cut in…
An American petroleum and natural gas exploration and production company. Chesapeake Energy filed for Chapter 11 bankruptcy in June 2020, then it emerged from bankruptcy as a smaller and more focused energy company, primarily concentrating on natural gas assets in the Haynesville Shale region.
Continental Resources – NOW PRIVATE
Continental Resources, Inc. (CLR) is an American independent energy company that primarily focuses on the exploration, production, and development of oil and natural gas resources.
The company was founded by Harold Hamm in 1967 and has grown to become one of the leading independent oil and gas exploration and production companies in the United States. Continental Resources plays a significant role in the domestic energy sector, contributing to the country’s energy production and reserves.
The company transitioned back to being privately owned, with founder Harold Hamm regaining control. Unfortunately, stocks of Continental Resources are not trading anymore.
Coterra Energy (Ex-Cabot Oil & Gas) (CTRA-N)
(Top Pick March 10/14, Down 14.12%) They are a lower cost operator. He sold this a couple of months after recommending it. Their challenge has been that their industry has been wildly successful in getting production growth and now there is a severe shortage of pipelines in the region so the price they sell for…
Coterra Energy Inc. is a company engaged in hydrocarbon exploration, primarily focused on natural gas, natural gas liquids, and oil extraction. It was formed through the merger of two energy companies, Cabot Oil & Gas and Cimarex Energy. This merger combined Cabot’s extensive natural gas operations in the Marcellus Shale with Cimarex’s diversified oil and gas assets across the United States, including the Permian Basin.
The company aims to leverage the strengths of both entities to enhance its operational efficiencies, reduce costs, and improve its environmental footprint while striving to meet growing energy demands. Coterra Energy is known for its commitment to responsible energy development, with a focus on technological innovations and sustainable practices.
Chevron Texaco (CVX-N)
(A Top Pick Nov 23/22, Down 20%) Took profits to rotate into sectors with higher beta. Oil stocks have come off with price of oil. Chart's been sideways, earnings disappointment. Longer term, likes the energy space with demand moving higher and supply cuts. 7.5% free cashflow yield, 4.2% dividend yield. He'd consider adding back into…
Chevron Corporation (NYSE: CVX) is one of the world’s largest integrated energy companies, and it is commonly referred to as Chevron, rather than Chevron Texaco. Chevron is involved in various aspects of the energy industry, including exploration, production, refining, marketing, and distribution of oil and natural gas, as well as the production of petrochemicals.
The name Chevron Texaco was used in the past when Chevron merged with Texaco Inc. in 2001, creating one of the largest energy companies in the world. However, the merged entity later rebranded itself as Chevron Corporation, and the Texaco brand was phased out.
One notable development is that Chevron Corporation (NYSE: CVX) acquired Noble Energy in a transaction that was completed in October 2020. This acquisition expanded Chevron’s presence in the global energy market and provided access to Noble Energy’s significant oil and natural gas assets, particularly in the Eastern Mediterranean and the United States.
EOG Resources Inc (EOG-N)
He's overweight energy, but supply/demand hasn't rewarded him yet. It reported a beat, but shares are up only 1% today and he's disappointed.
A petroleum and natural gas exploration company. They are expecting to see a fourth quarter profit boost from oil and gas hedging. They are a shale oil producer that has weathered well the oil price drop. They topped profit estimates last year. EOG Resources Inc. is an American energy company that is involved in the exploration, production, and marketing of oil and natural gas.
The company is publicly traded on the New York Stock Exchange (NYSE) under the ticker symbol “EOG.” EOG Resources is headquartered in Houston, Texas, and it is one of the largest independent oil and gas companies in the United States.
EOG Resources focuses on developing and producing hydrocarbons from various resource plays, including shale oil and gas. The company has operations in multiple regions across the United States, such as the Eagle Ford Shale in Texas, the Permian Basin in Texas and New Mexico, and the Bakken Formation in North Dakota. They also have international operations, including activities in Trinidad and Tobago.
Kinder Morgan Inc. (KMI-N)
Doesn't follow this name closely, but likes energy infrastructure as a highly attractive area and a key part of the energy transition. His preference is ENB.
The largest energy infrastructure company in North America. Strong performance in its pipeline and terminal business helped their profits surge last quarter. They’re also working on building ports in Texas, as US oil export booms.
Kinder Morgan Inc. (NYSE: KMI) is a publicly-traded energy infrastructure company based in the United States. It is one of the largest energy infrastructure companies in North America. Kinder Morgan operates and owns an extensive network of pipelines and terminals that transport and store various energy products, including natural gas, crude oil, refined petroleum products, and more.
The company’s business includes the transportation and storage of energy products, as well as the operation of natural gas pipelines and terminals. Kinder Morgan’s pipeline network spans thousands of miles, allowing for the movement of energy resources across North America. The company plays a crucial role in the energy supply chain, helping to move energy products from production sources to end-users, such as power plants, industrial facilities, and residential consumers.
Southwestern Energy (SWN-N)
options Energy continues to see action. This is trading at $8, buying 20,000 of the May 7 calls in order to get more leverage. They will move as the stock moves up. He remains very overweight energy.
Southwestern Energy (SWN-N) is an American energy company primarily engaged in the exploration, production, and marketing of natural gas and oil. The company has operations primarily in the United States, with a focus on natural gas production from various shale plays, including the Appalachian Basin and the Fayetteville Shale in Arkansas.
Southwestern Energy has gone through various transformations and strategic changes over the years. In 2014, the company sold its Fayetteville Shale assets and shifted its focus to the Marcellus and Utica Shales in the Appalachian region, where it was primarily involved in natural gas production.
Exxon Mobil (XOM-N)
Are too many variables in crude oil and prices will fluctuate. What will OPEC+ do with supplies? XOM is a great company.
An American multinational oil and gas corporation. Exxon Mobil Corporation (XOM-N) is a multinational energy company based in the United States. It is one of the world’s largest publicly traded oil and gas companies, and its stock is often listed under the ticker symbol “XOM” on various stock exchanges, including the New York Stock Exchange (NYSE). Exxon Mobil is involved in various aspects of the energy industry, including exploration, production, refining, and marketing of oil and natural gas, as well as the manufacturing and sale of petrochemical products.
The company has a long history and a significant global presence in the energy sector. It is known for its involvement in the exploration and development of oil and gas reserves, as well as its extensive network of refineries and gas stations around the world. Exxon Mobil has faced its share of controversies and challenges over the years, particularly related to environmental and climate change concerns.
Natural Gas Stocks Canada List
Canadian natural gas stocks such as Enbridge and Suncor Energy are among the top picks in the industry. These companies have a strong presence in the natural gas sector and have demonstrated consistent growth over the years. Enbridge and Suncor Energy, two leading Canadian energy companies, have a strong foothold in the natural gas sector. Their integrated energy business models, encompassing both oil and natural gas, contribute to their overall performance and long-term growth potential.
TC Energy (TRP-T)
TRP currently has a high debt load, with a net debt of and net debt/EBITDA reaching 8.2x, which is high compared to peers and to TRP’s historical range as well. The total capex is also quite high, estimated to be around $12B, which accounts all the operating cash flow. This is very common for the…
TC Energy (TRP-T), often listed as TRP-T on stock exchanges, is a well-established energy infrastructure company based in Canada. The company is primarily involved in the development and operation of energy infrastructure projects, including the construction and management of natural gas and liquids pipelines, power generation facilities, and various energy-related ventures. TC Energy is known for its extensive network of pipelines that transport natural gas and liquids across North America.
Imperial Oil (IMO-T)
It's a stable, well-run integrated oil company, but he's never owned this, because the US parent majority-controls IMO. Is better growth elsewhere.
Canada’s second-biggest integrated oil company. They are financially strong, and it could be a good time to get in, as their valuation has been reaching historic lows. Fundamentally, the company is very good, but concerns over the sector have beaten it down, making for an attractive buying opportunity.
Imperial Oil (IMO-T) is a prominent Canadian petroleum company engaged in various aspects of the oil and gas industry. It is one of the largest integrated oil and gas companies in Canada.
Imperial Oil operates in several key areas of the energy sector, including exploration, production, refining, and marketing; the company’s presence in both upstream and downstream segments, including oil sands development, refining, and retail, contributes to its importance in the Canadian and North American energy landscape.
Suncor Energy Inc (SU-T)
Likes it a lot, its upstream, midstream and downstream operations. They enjoy very long-life reserves in the Oil Sands. The dividend is quite good and it well managed. Seasonal strength happens in December-January, so buy on weakness, and hold long term.
A company that specializes in production of synthetic crude from oil sands. They have a lot of growth potentially and are a low cost operator. They’ve been generating a lot of free cash flow. A premiere holding in Canadian energy.
Suncor Energy Inc. (SU-T) is a prominent Canadian energy company with a diversified portfolio of operations in the oil and gas industry. Suncor is one of the largest integrated energy companies in Canada and is involved in various aspects of the energy sector.
Suncor Energy is a significant player in the Canadian and North American energy sectors. Its diverse operations cover upstream exploration and production, oil sands development, refining, marketing, and a growing focus on renewable energy. The company’s commitment to sustainability and responsible resource development aligns with the changing landscape of the energy industry.
Cenovus Energy (CVE-T)
For Baytex there is some consolidation here due to some nervousness re the price of oil. Cenovus is similar to Baytex and has dropped to the consolidation level. It could go to the $20 level in the next 3 to 6 months. Don't buy energy now since it could retrace much of its big gains.
An integrated oil company. They’re moving more oil by rail and the price is good. They have good exposure to WCS differentials, and the new CEO is repositioning the company. A good choice for those looking to get exposure in a large cap Canadian natural gas stock.
Cenovus Energy (CVE-T) is a Canadian integrated oil and natural gas company that operates in the energy sector. Cenovus Energy is a publicly traded company listed on the Toronto Stock Exchange (TSX) under the ticker symbol CVE.
Cenovus is involved in various aspects of the energy industry, including the exploration, development, production, and marketing of crude oil, natural gas, and natural gas liquids. The company is known for its operations in the oil sands region of Alberta, Canada, which is one of the largest oil reserves in the world. In 2021, Cenovus acquired Husky Energy (HSE-T) which was anothre top Canadian natural gas stock.
Gibson Energy (GEI-T)
(A Top Pick Aug 24/23, Up 7%) It is an energy storage and midstream type of company. It has a good dividend so focus on that. You can continue to hold above $19.
A supplier to the oil and gas industry. They are more of a pipeline company, with a refocusing on infrastructure. If oil continues to rise, this company will go up with it. Gibson Energy Inc. (GEI-T) is a Canadian energy company that operates in the midstream sector of the energy industry, is primarily involved in providing a wide range of services related to the storage, processing, and transportation of crude oil, condensate, and other hydrocarbon products.
The company’s operations include the storage of energy products in various terminals, the transportation of crude oil via pipelines, and the provision of other infrastructure and services to support the energy industry.
Tourmaline Oil Corp (TOU-T)
"The CNQ of natural gas." Great management team, assets, balance sheet. Not excited by its trading at 5.5x. 6x multiple is reasonable with 8% upside. Amazing optionality with LNG, but until then he'd rather buy other names for capital appreciation of 100% or more. Yield is 7%, plus writing calls.
Tourmaline Oil Corp (TOU-T) is a Canadian energy company primarily involved in the exploration, development, and production of natural gas and oil resources. Tourmaline is based in Calgary, Alberta, and it is a significant player in the Canadian energy sector, particularly in the Western Canadian Sedimentary Basin. It is an independent natural gas producer. They are considering adding to their dividends or to buy back stocks, as they look forward to having more cash flow. Their balance sheet is good, and they have good managers. They are moving more liquid natural gas and building facilities.
The company’s activities include the acquisition, exploration, and development of energy reserves, with a focus on unconventional resources such as natural gas and oil from shale formations. Tourmaline has operations in various regions of Canada, including Alberta, British Columbia, and Saskatchewan.
Canadian Natural Resources (CNQ-T)
Checks all the boxes. Most widely owned name in Canada. Has done phenomenally well. Fair multiple is 7x, yet trades at 6.5x. Sees only 9% upside, not enough in such a volatile sector. He sold in early November.
Canadian Natural Resources Limited (CNQ) is a Canadian oil and natural gas exploration, development, and production company. It is one of the largest independent crude oil and natural gas producers in the world. The company is headquartered in Calgary, Alberta, and it operates in various regions, including Western Canada, the North Sea, and Offshore Africa.
Canadian Natural Resources is involved in the exploration and production of oil and natural gas from a wide range of assets, including oil sands, conventional crude oil, natural gas, and offshore drilling. The company’s diverse portfolio of assets and operations make it a significant player in the global energy industry.
Frequently Asked Questions – Natural Gas Stocks
Q. What are natural gas stocks?
Natural gas stocks refer to shares or equities of companies involved in the exploration, production, transportation, and distribution of natural gas. These stocks provide investors with the opportunity to invest in the natural gas industry and benefit from its growth and profitability.
Q. How do natural gas stocks relate to energy stocks?
Natural gas stocks are a subset of energy stocks, which encompass companies involved in various aspects of the energy sector, including oil and gas exploration, production, refining, and distribution. Natural gas stocks specifically focus on companies involved in the natural gas sector.
Q. What factors should I consider when investing in natural gas stocks?
When considering investing in natural gas stocks, it is important to evaluate factors such as the company’s cash flow, dividend yield, balance sheet strength, natural gas prices, and the overall performance of the energy sector. Additionally, keeping an eye on oil prices and the company’s production and exploration activities can help determine the potential profitability of natural gas stocks.
Q. What are the Best Natural Gas Stocks Canada?
Some top picks for natural gas stocks in Canada and the USA include Canadian energy companies like Suncor Energy and Enbridge, as well as independent oil and gas companies focused on natural gas production. These companies have a strong presence in the market and are backed by their expertise and experience in the energy industry.
Q. What are the Best Natural Gas Stocks USA?
Natural gas stocks can benefit shareholders in multiple ways. Firstly, if the company performs well, shareholders can enjoy capital gains as the share price increases over time. Additionally, many natural gas stocks provide dividends, allowing shareholders to earn a portion of the company’s profits as a return on their investment.
Q. Do natural gas stocks have a good future outlook?
The future outlook for natural gas stocks can vary depending on numerous factors such as market demand, government regulations, and global energy trends. However, as the world transitions towards cleaner energy sources and seeks to reduce reliance on fossil fuels, natural gas stocks may face challenges in the long term. Therefore, it is crucial to closely monitor market conditions and industry developments when evaluating their future prospects.
Q. How does natural gas contribute to the energy sector?
Natural gas is an important energy resource that plays a significant role in the energy sector. It is used for electricity generation, heating, cooking, and as a fuel in various industries.
Q: Are there any dividend-paying natural gas stocks?
A: Yes, there are dividend-paying natural gas stocks available in the market. Companies like Canadian Natural Resources and TSX offer quarterly dividends to their shareholders, making them attractive options for investors looking for both growth potential and a regular income stream.
Q: Can you recommend some of the best natural gas stocks?
A: In addition to natural gas stocks, some of the best energy stocks to consider buying in 2023 include oil stocks such as Exxon Mobil and Chevron. These companies have a strong presence in the oil and gas sector and are expected to benefit from higher oil prices and increasing consumer spending.
Q: What are the advantages of investing in Canadian natural gas stocks?
A: Investing in Canadian natural gas stocks can offer several advantages. Canada is one of the largest producers and exporters of natural gas, and companies such as Canadian Natural Resources have a strong foothold in the industry. Additionally, Canada’s stable political environment and favorable tax policies make it an attractive destination for investors.
Q: How do energy stocks perform in a bear market?
A: Energy stocks, including natural gas stocks, tend to be sensitive to market conditions, including bear markets. During a bear market, when the overall market sentiment is negative and stock prices decline, energy stocks may also experience a drop in value. However, long-term investors who believe in the fundamentals of the energy sector may view this as an opportunity to buy stocks at a lower price.