Top energy stocks for June 2024

Top energy stocks for June 2024
Heart	Business	Market capitalization (billions of dollars)	Price ($)	30-day return (%)	P/E ratio
NEXT	NextDecade Corp.	1.8	6.96	10.8	Not applicable
ARLP	LP Alliance Resource Partners	3.0	23.76	10.0	5.19
EQT	EQT company.	18.2	41.20	2.5	May 30
HPK	HighPeak Energy Inc.	2.0	15.27	1.3	12.45
CHRD	Chord Energy Corp.	7.6	182.58	-0.8	8.56
CHK	Chesapeake Energy Corp.	11.8	90.32	-0.8	12/16
VNOM	Viper Energy Inc.	6.9	38.79	-1.2	14.23
WLO	Valero Energy company	53.3	163/03	-1.3	8/07
CTRA	Coterra Energy Inc.	20.4	27.45	-3.1	16.00
XOM	Exxon Mobil.	513.0	114.36	-3.9	14/03

What is worth knowing about the energy sector

Energy stocks as a group experienced negative returns in 2023, but rose in early 2024 along with the price of oil. Generally speaking, energy company stock prices tend to follow changes in energy prices; e.g., when energy prices peaked in 2022 due to Russia’s invasion of Ukraine and the ongoing effects of the Covid-19 pandemic, many companies in the energy sector reported profits. While oil prices in 2024 have so far trended upward compared to 2023, prices for other energy sources such as natural gas and fuel oil have fallen significantly from their 2022 highs.

The level of production around the world is also key to the performance of the energy sector. US oil production has been quite high in recent months, but many OPEC+ countries have reduced production. The demand for energy products is constantly growing, but the question is whether the supply will increase accordingly.

How we chose the best energy stocks

We’ve identified the top energy stocks for June 2024 by conducting a sweep of all stocks in the sector. We start by selecting a subset of energy stocks that meet each of the following criteria:

• The share price is $5 or more
• Daily trading volume is 100,000 or more
• Market capitalization is $300 million or more

From this subgroup, we ranked energy stocks by 30-day return and selected the best-performing companies based on this metric. Please note that our top-rated company, NextDecade Corp., is not listed on the P/E ratio because it generated net losses during the period. It’s also important to note that the stocks we evaluate are energy stocks; this screen does not include products used directly in energy trading.

Advantages and disadvantages of energy reserves

One of the key advantages of energy stocks is that the energy market is huge, due to the fact that the world relies on the energy sector to power cars, factories, machinery and more. The global energy market is worth approximately $6 trillion. This means that companies can participate in the energy market in various ways, and sub-industries include, among others: energy storage, production, transport and distribution. Investors can find many opportunities to specialize or focus their investments in these sub-industries.

The energy industry is not only huge, but it also has significant growth potential. The United Nations expects the world will need to invest $2.4 trillion annually over the next 11 years in energy systems to meet the goals of the Paris Climate Agreement. As the world transitions to renewable energy sources, investors will have an increasing variety of opportunities to invest in companies unrelated to traditional fossil fuels.

On the other hand, energy also has some significant disadvantages. As described above, energy stocks are highly dependent on the price of energy, which is linked to a complex network of geopolitical factors and variables. This makes the energy sector very volatile at times.

Investors focused on ESG goals may have difficulty targeting energy companies while maintaining these principles. Fossil fuels in particular are a major contributor to climate change; As climate change progresses, new challenges are likely to arise in how energy is produced, stored and distributed.

Energy stocks have the potential to be profitable, but they also carry risks, including bankruptcy and volatility. And while the above stocks are at the top of our screen this month, past performance is no guarantee of future returns.

Comments, opinions and analyzes posted on Investopedia are for informational purposes only. For more information, please read our warranty and disclaimer.

As of the date of writing this article, the author does not own any of the securities mentioned above.