Hillcrest Energy Technologies. (CSE: HEAT)
From concept to commercialization, Hillcrest is investing in the development of energy solutions that will power a more sustainable and electrified future.
In the context of the global energy transition and decarbonization, the notion that the era of fossil fuels has ended is quite popular. However, in reality, considering the issue of energy security, fossil fuels will not be replaced in the short term and will likely be used for decades, presenting numerous investment opportunities in US oil and gas stocks.
Among the six major holdings of Warren Buffett’s Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B), two are from the oil and gas sector: Chevron (NYSE:CVX), accounting for 5.9% of the investment portfolio, and Occidental Petroleum (NYSE:OXY), accounting for 4.9%.
Additionally, despite the stellar performance of the energy sector in recent years, energy stocks are generally valued at lower levels. While it is unlikely that oil and gas company stock prices will return to the peaks of the past, the industry is highly profitable, with many companies being cash cows. Double-digit free cash flow yields are at least twice that of the S&P 500 Index. Thanks to robust financial health, US oil and gas companies offer substantial dividends, with dividend yields being 2 to 4 times those of the S&P 500 Index.
Here are seven selected US oil and gas stocks for 2024:
Exxon Mobil (NYSE:XOM), forward dividend yield of 3.3%: This oil and gas giant completed its acquisition of Pioneer Natural Resources this year. Additionally, Dreyfus, CEO and founder of Ardinall Investment Management, has joined the company’s board, and Exxon Mobil is actively investing in carbon capture and storage, hydrogen, low-carbon fuels, and lithium, enhancing the stock’s appeal to ESG investors.
Chevron (NYSE:CVX), forward dividend yield of 4.1%: Like Exxon, Chevron is a large integrated oil and gas company with substantial capital and a focus on investing in low-carbon solutions. Experts predict that even as clean energy sources like solar and wind continue to develop, substantial amounts of oil and gas will still be needed globally for decades, making this strategy sound.
TotalEnergies SE (NYSE:TTE), forward dividend yield of 4.8%: Unlike US oil and gas giants, French company TotalEnergies is heavily investing in renewable energy generation, aiming for a total installed capacity of 100 GW by 2030. By the end of the first quarter, the company’s installed capacity exceeded 23.5 GW, up by more than 1 GW from the previous quarter. Recently, TotalEnergies signed a memorandum of understanding for a large green hydrogen project with Tunisia.
Shell (NYSE:SHEL), forward dividend yield of 3.9%: At the beginning of this year, the British oil giant had around 2.5 GW of operating renewable energy capacity, 4.1 GW under construction or contracted, and approximately 40.2 GW of potential capacity. Shell has invested in green hydrogen company Verdagy and completed the acquisition of renewable natural gas producer Nature Energy Biogas last year. In its 2024 energy transition strategy, Shell stated it will invest $10-15 billion in low-carbon energy solutions between 2023 and 2025.
Williams Companies Inc. (NYSE:WMB), forward dividend yield of 4.7%: Natural gas is seen as a transitional fuel before more renewable energy sources can fully take over from coal, benefiting US natural gas pipeline operator Williams. Additionally, the company’s pipeline network is predominantly underground, making it costly and difficult to replace under current environmental policies.
Energy Transfer LP (NYSE:ET), forward dividend yield of 8.2%: This diversified energy infrastructure company focuses on the transportation, storage, and terminal of natural gas, crude oil, and refined products. The US is the largest exporter of liquefied natural gas (LNG), as well as a major oil exporter, thus Energy Transfer will benefit from the growth of US energy exports.
EQT Corp (NYSE:EQT), forward dividend yield of 1.5%: As the largest natural gas producer in the US, EQT supports US LNG exports and is expected to benefit directly from rising natural gas prices. This energy stock also has an artificial intelligence (AI) investment angle. The rapid development of AI requires more data centers, increasing the demand for stable electricity supply, with natural gas being a reliable energy source.”
