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【XM Market Review】--The Best Natural Gas Stocks to Buy Now
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Hello everyone, today XM Forex will bring you "【XM Market Review】--The Best Natural Gas Stocks to Buy Now". I hope it will be helpful to you! The original content is as follows:
Natural gas fulfills a crucial role despite the global energy transition to green alternatives such as solar, wind, tidal, and geothermal energy sources. Natural gas burns notably cleaner than other fossil fuels and provides a consistent, non-weather-dependent base load to the energy grid. The liquified natural gas (LNG) sector continues to boom, with global deal-making likely to accelerate. Learn about the best natural gas stocks to buy as demand outstrips supply.
What are Natural Gas Stocks?
Natural gas stocks refer to publicly listed xmbob.companies that are actively involved in the natural gas sector. These xmbob.companies operate in the upstream (exploration and production of natural gas), midstream (transportation and storage of natural gas), and downstream (refining and selling of natural gas products) sectors.
Why Should You Consider Investing in Natural Gas Stocks?
Investing in natural gas stocks provides investors with an asset class that moves independently of other sectors. Natural gas also experiences a supply-demand imbalance, which should keep prices elevated. The latest report from the Statistical Review of World Energy showed natural gas demand rose 2.5% in 2024 xmbob.compared to a 1.2% increase in production. The long-term nature of natural gas contracts provides revenue visibility, making natural gas stocks less prone to fiscal shocks.
Here are a few things to consider when evaluating natural gas stocks:
- Research the natural gas portfolio of natural gas stocks to ensure they have well-persified natural gas reserves.
- Diversify your natural gas sector exposure with infrastructure stocks that build the multi-billion dollar facilities and infrastructure the natural gas industry requires.
- Mix your natural gas stocks portfolio with xmbob.companies involved in upstream, midstream, and downstream sectors.
- Consider junior natural gas explorers with sufficient capital to discover new natural gas reserves.
What are the Downsides of Natural Gas Stocks?
Natural gas stocks heavily rely on the price of natural gas, which fluctuates together with economic conditions and the supply-demand situation. The rise of AI and data centers that power AI has provided a floor under natural gas prices, as forecasts expect a surge in electricity demand for the rest of this decade.
Here is a shortlist of natural gas stocks worth considering:
- The Williams xmbob.companies (WMB)
- Kinder Morgan (KMI)
- Cheniere Energy (LNG)
- Energy Transfer LP (ET)
- EQT Corporation (EQT)
- NextDecade (NEXT)
- First Trust Natural Gas ETF (FCG)
Cheniere Energy Fundamental Analysis
Cheniere Energy (LNG) is a liquefied natural gas (LNG) xmbob.company. It is the largest US producer of LNG and the second-largest globally. LNG owns and operates the Sabine Pass LNG Terminal and the Corpus Christi LNG Terminal in the US, which include vessel-chartering capabilities. LNG is also a xmbob.component of the Russell 1000 index.
So, why am I bullish on LNG after its recent correction?
The scale of operations will benefit Cheniere Energy, which just announced an expansion of its liquefaction facility at the Corpus Christi LNG Terminal. Its return on equity and on invested capital ranks among the best in its industry. Profit margins are superb, valuations are low, and LNG remains ideally positioned to benefit from the rise in demand for natural gas.
Metric
Value
Verdict
P/E Ratio
13.55
Bullish
P/B Ratio
7.59
Bearish
PEG Ratio
10.75
Bearish
Current Ratio
0.98
Bearish
Return on Assets
8.63%
Bullish
Return on Equity
57.39%
Bullish
Profit Margin
21.05%
Bullish
ROIC-WACC Ratio
Positive
Bullish
Dividend Yield
0.85%
Bearish
The price-to-earnings (P/E) ratio of 13.55 makes LNG an inexpensive stock. By xmbob.comparison, the P/E ratio for the S&P 500 is 29.65.
The average analyst price target for LNG is $270.55. It suggests good upside potential with manageable downside risks.
Cheniere Energy Technical Analysis
- The LNG D1 chart shows price action breaking down below its ascending Fibonacci Retracement Fan, but bouncing off solid support levels.
- It also shows Cheniere Energy dipping into its horizontal support zone before closing above it.
- The Bull Bear Power Indicator is bearish, but remains within its ascending trendline.
My Call on Cheniere Energy
I am taking a long position in Cheniere Energy between $228.50 and $236.16. It approved an expansion of its Corpus Christi LNG Terminal, valuations are low, and the scale of LNG makes it one of my top natural gas stock picks.
Energy Transfer LP Fundamental Analysis
Energy Transfer LP (ET) is a midstream natural gas xmbob.company engaged in pipeline transportation and storage for natural gas, crude oil, NGLs, refined products, and liquid natural gas (LNG). ET is one of the largest US midstream xmbob.companies with over 125,000 miles of pipelines. It is also one of the leading global LNG exporters.
So, why am I bullish on Energy Transfer LP despite its rally since May?
I like the recent $7.1 billion acquisition of WTG, with plans to add over 50 million cubic feet per day (MMcf/d) of capacity at four different Permian Basin processing plants. It will boost its revenues and balance sheet amid surging electricity demand from data centers. Energy Transfer LP also has a growing international portfolio and remains one of the most undervalued midstream natural gas xmbob.companies.
Metric
Value
Verdict
P/E Ratio
13.41
Bullish
P/B Ratio
1.71
Bullish
PEG Ratio
0.73
Bullish
Current Ratio
1.15
Bearish
Return on Assets
3.57%
Bullish
Return on Equity
12.85%
Bullish
Profit Margin
5.55%
Bearish
ROIC-WACC Ratio
Negative
Bearish
Dividend Yield
7.34%
Bullish
The price-to-earnings (P/E) ratio of 13.41 makes ET an inexpensive stock. By xmbob.comparison, the P/E ratio for the S&P 500 is 29.65.
The average analyst price target for Energy Transfer LP is 22.50. It suggests decent upside potential, with limited downside risks.
Energy Transfer LP Technical Analysis
- The ET D1 chart shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan.
- It also shows Energy Transfer LP just above its horizontal support zone.
- The Bull Bear Power Indicator turned bearish, but remains above its ascending trendline.
My Call on Energy Transfer LP
I am taking a long position in Energy Transfer LP between $17.08 and $17.56. ET expands its production capacity amid rising natural gas demand, its valuations and PEG ratio confirm a tremendously undervalued stock, and its pidend yield xmbob.compensates investors for short-term price fluctuations.
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