With the economy slowly opening up, the energy industry can present some exciting opportunities for investors in 2021. And the oil prices are already spiking. In this article, we’ve put together some of the top energy stock recommendations by analysts. These top energy stocks for 2021 should be on your watchlist.
As the global economy is bouncing back, we will see some positive results within the foreseeable future in the energy industry. The current economic landscape looks promising — and the energy industry is on the path of a significant transition. For a portion of 2020, the oil companies were in turmoil with lower demand & their stocks went down every day. But the good news for investors is that it is rebounding, with crude oil prices rising steadily in 2021. So, it’s an excellent time for investors to look at the top energy stocks for 2021.
For the first time since last year, Brent crude oil prices in the U.S. have hit $65 a barrel. With a positive outlook of the energy market, it looks like crude oil prices will be less volatile in 2021. According to the U.S. Energy Information Administration, the renewable energy share in electricity generation will increase from 21% to 42%. From every perspective, the energy industry is in an excellent position. So as you look forward to investing in the remainder of 2021, we’ve got this list of the Top Energy Stocks for 2021. Let’s dive deeper:
The energy industry plays a vital role in the global economy. It consists of the companies involved in the production, marketing, and distribution of oil gas & renewable sources of energy. The industry helps in the fuel and other needs of the global economy.
While investing in the energy industry can be risky, but if you are making the right move at the right time, the market condition can bring you favorable results. You don’t know what can flip the game, bringing you to the right end. For instance, Exxon Mobil stock was traded for $12 per share in 1990, which turned to $58 per share in 2021. And, it became one of the top-traded companies in the US & around the world.
Oil prices are coming back to normal rates ever since the pandemic hit us. So, let’s find out the best and most lucrative top Energy Stocks for 2021. Here we go:
CEO Mike Wirth called 2020 an “unprecedented year” for the company. The company was struggling to get back on its feet. But, it is now bouncing back, bringing some real investment goals as its balance sheet shines through. In the third quarter of the year, Chevron’s debt to equity ratio was about 0.26 times (which was the lowest in the industry).
Chevron Corporation is a multinational energy company founded in 1879, and today it operates in over 180 countries. In April, the company announced signing a deal with one of the major car makers of Japan. This was about the company’s diversification to areas beyond fossil fuel and will include the production of green hydrogen businesses in the United States. The company is coming back to normalcy — and in the first quarter of 2021, Chevron’s chemical and refining division saw a profit of $5 million. It can be an excellent choice for investors as Chevron is one of the Top Energy Stocks for 2021.
As per the Trefis Machine Learning Engine, ConocoPhillips stock might see a 2.2% rise. The stock is expected to outperform the S&P 500 within the next trading weeks. The share has risen to 50% from its January lows, and as we are entering the second half of the year, the future of ConocoPhillips is looking pretty optimistic.
As Søren Kierkegaard says, “Life can only be understood backward, but it must be lived forwards.” — and rightly so. While 2020 has not been a great year for the energy industry, if you look carefully, you’ll see many things happening on Wall Street. Not only is ConocoPhillips forecasting a massive profit in 2021, but it also has its plans set. So, if you are looking for top energy stocks for 2021 — ConocoPhillips is one you need to watch out for.
Suncor Energy Inc. is an integrated oil and gas stock from Canada. It's a leader in the marketing, exploration, and refining of oil sands. How it uses an integrated business model makes it a more exciting prospect for investors. At 1.3%, it is one of Berkshire Hathaway's minor holdings. Suncor Energy (SU) also has some value play. Compared to 2019, the company lowered its annual operating costs by 12% or $1.3 billion in 2020. In 2021, it plans to pay $1 billion to $1.5 billion of debt and repurchase between $500 million and $1 billion of the company's shares.
Companies focusing more on running as lean an operation as possible and cost-cutting can drive more substantial results in 2021. The Suncor dividend had slashed a quarterly dividend of $0.465 to just $0.21 last year. The company turning things around in 2021 from what it was in 2020 gives us a solid reason to think why it is one of the Top Energy Stocks for 2021. In the past few months, the company shares have gained 14.1% compared to the industry, which stands at 0.3% growth. And, the analysts have good reason to say that Suncor Energy Inc.stocks are a good choice for investors at this point.
Enbridge operates in the US & Canada. It’s a midstream oil & gas company, which is one of the safest for investors. It pays a dividend yield of 7.51% to the investors. The Canadian company operates in four major areas, including renewable power (3%), a natural gas utility operation (14%), natural gas pipelines (29%), and crude oil pipelines (54% of EBITDA). Ostensibly, it’s a more diversified mix than other energy sector companies. And Enbridge has already started its preparations to deal with a low-carbon world.
25% of North America’s crude comes from Enbridge. The company has an eye on long-term growth. The $16 billion growth program secured through 2023 tells about a huge growth of $2 billion+ in incremental EBITDA. In addition, Enbridge plans for a 4-5% annual DCF growth in the years to come. For the company, the borrowing costs are among the lowest when compared to its peers. There are a plethora of solid signs that qualify it as a good investment option in 2021. As the company moves into shoring up cash, it could be an excellent bet for investors, making it one of the top energy stocks for 2021.
The Enterprise Products Partners (EPD) is a midstream energy company that provides consumers & businesses with refined products, crude oil, natural gas liquids (NGLs), natural gas, and petrochemicals. There are four segments to its operation— Petrochemical & Refined Products Services, NGL Pipelines & Services, Natural Gas Pipelines & Services, and Crude Oil Pipelines & Services. The company was founded in 1968, and its headquarters is in Houston, Texas.
Last year with the pandemic affecting almost all industries, the Enterprise Products Partners stock price was reduced by 30%. However, in 2021, the company’s stocks have already risen to over 17% and are expected to increase exponentially in the coming months. With a huge 7.8% yield, Enterprise Product Partners gives numerous reasons for investors to buy and put it on the list of top energy stocks for 2021.
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