Best Natural Gas Stocks

Now that you understand what to look for in a natural gas stock, let’s examine a few natural gas stocks that investors are keeping their eyes on.

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Contributor, Benzinga
June 21, 2023

Southwestern Energy (NYSE:SWN)

Southwestern Energy Co is a US-based independent energy company. It is engaged in exploration, development and production activities, including related natural gas gathering and marketing. The company principally carries its business activities in the United States. The operating segments of the company are the Exploration and Production and Marketing segment. Its Exploration and Production segment is the key revenue driver for the company which includes the revenue derived from the production and sale of natural gas and liquids. The Marketing segment generates revenue through the marketing of both the company and third-party produced natural gas and liquids volumes and through gathering fees associated with the transportation of natural gas to market.

$6.44
-0.01[-0.16%]
Last update: 4:41AM (Delayed 15-Minutes)
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Vol / Avg.853.000 / 18.875MMkt Cap7.093B
Day Range- - -52 Wk Range4.570 - 7.475

Exxon Mobil (NYSE:XOM)

Exxon Mobil Corporation, doing business as ExxonMobil, is an American oil and gas corporation with a history dating back over 135 years. ExxonMobil began as a regional kerosene production company and has since scaled its operation up to include both excavating and exporting natural gas and oil.

If you’re looking for a natural gas stock with the largest market capitalization, ExxonMobil might be right for you. Its market capitalization is the largest on this list at over $195 billion and its EPS is a steady $2.66. Dividend investors may also want to buy into ExxonMobil for its high 7.54% dividend yield.

$117.80
0.22[0.19%]
Last update: 7:00AM (Delayed 15-Minutes)
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Vol / Avg.9.085K / 15.567MMkt Cap469.610B
Day Range- - -52 Wk Range87.140 - 120.700

Cheniere Energy (AMEX:LNG)

Cheniere Energy Inc. is the leading producer and exporter of liquefied natural gas in the U.S. It provides reliable, clean and affordable solutions to the growing needs of natural gas. Cheniere is a full-service liquefied natural gas provider that procures, transports and adds liquefaction, vessel charting and delivery to its capacity.

The natural gas stock has a market cap of $12 billion and an EPS of $4.30. It has high liquidity and trades over 1.2 million shares per day. Cheniere Energy generated revenue of $9 billion in 2019.

$165.96
0[0.00%]
Last update: 8:00PM (Delayed 15-Minutes)
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Vol / Avg.0 / 1.315MMkt Cap39.934B
Day Range- - -52 Wk Range135.000 - 182.300

Chesapeake Energy (NASDAQ:CHK)

Chesapeake Energy Corp is a US-based exploration and production company. It is engaged in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs. Geographically, the company focuses its exploration, development, acquisition, and production efforts in the operating areas of Marcellus, Northern Appalachian Basin in Pennsylvania; Haynesville, Northwestern Louisiana (Gulf Coast); Eagle Ford, South Texas; Powder River Basin, Stacked pay in Wyoming; and Brazos Valley – Southeast Texas.

$86.23
0[0.00%]
Last update: 4:00PM (Delayed 15-Minutes)
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Vol / Avg.0 / 1.779MMkt Cap11.413B
Day Range- - -52 Wk Range69.680 - 107.310

Antero Resources (NYSE:AR)

Antero Resources, headquartered in Denver, handles exploration and production of natural gas and natural gas liquids in the United States and Canada. At the end of 2020, the company reported proven reserves of 17.6 trillion cubic feet of natural gas equivalent resources. Production averaged approximately 3,578 million cubic feet of equivalent a day in 2020 at a ratio of 33% liquids and 67% natural gas.

Antero has a market cap of $4.8B with strong growth from the low $2.00 range up to its current price.

$25.38
0[0.00%]
Last update: 7:00PM (Delayed 15-Minutes)
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Vol / Avg.0 / 4.755MMkt Cap7.624B
Day Range- - -52 Wk Range19.912 - 40.190

Black Stone Minerals (NYSE:BSM)

Black Stone Minerals LP is an oil and natural gas mineral company. It owns oil and natural gas mineral interests, which make up the vast majority of the asset base. Its principal business is actively managing an existing portfolio of mineral and royalty assets to maximize its value and expanding asset base through acquisitions of additional mineral and royalty interests.

$17.23
0[0.00%]
Last update: 4:09PM (Delayed 15-Minutes)
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Vol / Avg.10.000 / 433.132KMkt Cap3.618B
Day Range- - -52 Wk Range13.410 - 20.220

EQT (NYSE:EQT)

EQT Corp is an independent natural gas production company with operations focused in the cores of the Marcellus and Utica shales in the Appalachian Basin, located in the Eastern United States. The firm focuses on executing combo-development projects for developing multiwell pads to meet supply needs, with a focus on maximizing operational efficiency, technology, and sustainability. Its main customers include marketers, utilities, and industrial operators in the Appalachian Basin. The company has one reportable segment and its revenue stems from three types of gas reserves: natural gas, natural gas liquids, and crude oil. All of the firm’s operating revenue is generated in the U.S., with most revenue flowing from the Marcellus Shale field and through the sale of natural gas.

$40.47
-0.11[-0.27%]
Last update: 7:08AM (Delayed 15-Minutes)
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Vol / Avg.11.554K / 5.425MMkt Cap16.644B
Day Range- - -52 Wk Range28.105 - 45.890

Earthstone Energy (NYSE:ESTE)

Earthstone Energy Inc is an independent oil and natural gas development and production company. The company focuses on the acquisition, development, exploration, and production of onshore, crude oil and natural gas reserves. It is also active in corporate mergers and the acquisition of oil and natural gas properties. The company’s reserve portfolio consists of assets in the Midland Basin of West Texas, and the Eagle Ford Trend of South Texas. Its operations are all in the upstream segment of the oil and natural gas industry and are conducted onshore in the United States.

$20.25
0.01[0.05%]
Last update: 4:47PM (Delayed 15-Minutes)
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Vol / Avg.10.000 / 1.806MMkt Cap2.153B
Day Range- - -52 Wk Range11.320 - 21.980

Range Resources (NYSE:RRC)

Range Resources Corporation operates as an independent natural gas, natural gas liquids (NGLs), and oil company in the United States. The company engages in the exploration, development, and acquisition of natural gas and oil properties, as well as marketing and selling natural gas and NGLs to a range of utilities.

$32.66
0.25[0.77%]
Last update: 5:24AM (Delayed 15-Minutes)
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Vol / Avg.432.000 / 2.484MMkt Cap7.883B
Day Range- - -52 Wk Range22.610 - 34.540

Natural gas is a type of fossil fuel formed millions of years ago deep beneath the earth’s surface. Every year, the United States produces over 30 trillion cubic feet of natural gas. Natural gas is primarily used to create both residential and industrial electrical power. Understanding natural gas stocks is an important aspect of wise investing. Yes, natural gas may seem like a constant, but it’s under pressure from the oil and renewable energy sectors, meaning that the entire energy sector is competing with itself. So, when you make investments in natural gas, they cannot necessarily be your only exposure to the energy industry.

When compared to other fossil fuels, like coal and heavy oils, natural gas is considered to be one of the cleaner fossil fuels because it releases fewer toxic compounds into the air when burned. Yes, natural gas may seem like a revelation to some, but to others, it is part of the problem. So, which stocks are adjusting to the new marketplace, calls for green energy and more? How can you invest in this sector safely and continue to profit? You want to get into natural gas now before it starts to slide, but how long could it be until the sector begins to fall off.

Natural gas corporations continue to be profitable ventures for investors while also powering the country. Do you think that investing in natural gas might be right for you? Today, we’ll take a look at a few natural gas stocks investors are watching, a few of the best brokers for buying and selling stocks and a few of the qualities you should look for when you compare natural gas stocks. 

Quick Look at the Best Natural Gas Stocks:

  • Southwestern Energy Co
  • Exxon Mobil Corporation
  • Cheniere Energy Inc.
  • Chesapeake Energy Corp
  • Antero Resources
  • Black Stone Minerals LP
  • EQT Corp
  • Earthstone Energy, Inc.
  • Range Resources Corporation

Overview: Natural Gas Stocks

The once swampy earth and its decomposed plants and animals produced layers and layers of carbon-based materials. These would pile on top of one another and mix with silt, sand and carbon calcite to create an immense amount of pressure. This pressure caused some of the organic material to change the carbon and hydrogen into natural gas. Other pockets of organic material became coal, petroleum and other fossil fuels.  

Natural gas contains a range of different chemical compounds but is primarily composed of methane. Methane is a colorless, odorless and tasteless gas that can be burned to create electrical power. Using natural gas as an energy source dates back to the early 1800s, when gas was used to illuminate street lamps. 

Today, the burning of methane gas is primarily used to create electrical energy, which is then distributed to homes, factories and commercial spaces. Companies that excavate, process or distribute natural gas may offer investors the opportunity to own a portion of the company by purchasing shares of stock. At the same time, you’re gaining exposure to the sector without buying in completely. Going one stock at a time and carving out a small niche in your portfolio is the best way to break into any new asset class.

Natural gas, too, is something that can be utilized further so that it can complete with the renewable energy sector. If not, it could have a difficult time keeping up—as will the oil sector at some point. However, natural gas may hold on longer purely because of its versatility and better public image.

Best Online Brokers for Natural Gas Stock

No matter if you’re looking for natural gas stocks to add to your portfolio for decades or you’re simply searching for energy stocks under $5 to swing trade, you’ll need to open a brokerage account before you can buy or sell any stocks. Most brokers now allow you to create an account online and begin your self-directed trading through an all-in-one platform. Search for the best fit so that you can easily build your portfolio and feel comfortable with the results you’re getting. If you don’t feel comfortable with your broker, you will not feel comfortable investing.

If you don’t already have a brokerage account, consider a few of Benzinga’s favorites below. 

  • securely through Centerpoint Securities's website
    securely through Centerpoint Securities's website
    Best For:
    Momentum traders
    Rating:
    Read Review
  • Securely through Interactive Brokers’ website
    Securely through Interactive Brokers’ website
    Best For:
    Active and Global Traders
    Rating:
    Read Review
  • securely through Magnifi's website
    securely through Magnifi's website
    Best For:
    AI Investing
    Rating:
    Read Review
  • securely through Webull's app
    securely through Webull's app
    Best For:
    Intermediate Traders and Investors
    Rating:
    Read Review
  • securely through TD Ameritrade's website
    securely through TD Ameritrade's website
    Best For:
    Retirement Savers
    Rating:
    Read Review
  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Rating:
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    86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Features to Look for in a Natural Gas Stock

Unfortunately, not every natural gas stock is equally as valuable. Natural gas stock prices are highly correlated with market natural gas prices, which means that they may quickly change in value depending on trade conditions. Many natural gas stock prices fell sharply after the onset of the COVID-19 pandemic as natural gas demand fell.

Here are a few characteristics to look for when you shop for natural gas stocks.  

  • A positive earnings per share value: A company’s earnings per share value (EPS) is equal to its current revenue minus dividends divided by the total number of shares outstanding. A natural gas corporation may have a large amount of debt (especially if the company is relatively new) but if its EPS value is positive, it means that the company is currently profitable. Look for natural gas stocks with a positive EPS value and check to see if the company has maintained it for at least its most recent quarters.
  • A safe and sustainable dividend yield: Many investors turn to the energy sector when they search for income-producing stocks because most energy companies elect to pay out dividends. A dividend is a portion of a company’s profit that is paid out to shareholders annually, monthly or quarterly.
  • Proper management: Energy companies might seem like no-brainers, but they don’t print money. Each and every natural gas stock you choose must be managed properly and perform well year-on-year. If not, you may want to move away. Remember, natural gas might be popular, but it can’t last forever. You want to know that these companies will pivot well with the market.
  • Potential supply: When you invest in natural gas stocks, remember that the companies which produce natural gas need to have a good potential supply. If those companies refine natural gas, do they have enough capacity to keep up with the market.

Though it can be tempting to shop for stocks by the dollar amount they pay out per year, consider the dividend yield instead. The dividend yield is calculated by dividing the company’s current annual dividend by its current stock price. You should look for stocks with a dividend yield below 10% — this indicates that the dividend is sustainable and less likely to be cut soon.

  • A large market capitalization: A company’s market capitalization is calculated by multiplying its total number of outstanding shares by the current market price of 1 share. Because natural gas prices can change daily and drop sharply when demand is low, investing in a large-cap company with a higher market capitalization can help protect your investments. Look for companies with market caps above $10 billion — these companies are usually safer and more stable investments. 

Adding Energy to Your Portfolio

No matter if you’re investing in major corporations like ExxonMobil or you’ve only got the funds for a few stocks under $10, energy investments can provide a valuable stream of passive income for your portfolio. However, it’s important to remember that natural gas stocks can be very volatile investments. 

If you do decide to add natural gas stocks to your portfolio, make sure that they don’t make up the majority of your investments. Instead, use them to complement a larger portfolio of total market index funds, S&P 500 funds and large-cap stocks.

Q

What are natural gas stocks?

A

Natural gas stocks are shares in companies that produce natural gas.

Q

Are natural gas stocks a good investment?

A

Natural gas stocks can be volitile, but investing in them can be a great way to diversify your portfolio.

Q

Where can I find a broker for natural gas stocks?

A

You can review the list above of Benzinga’s favorite natural gas stocks.