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Top Natural Gas Stocks for Q4 2022

by SuperiorInvest

Natural gas it has long been a basic resource used in heating, cooking and electricity generation. Recently, it has started to appear more in industrial applications and even as a fuel source for cars. The US Department of Energy estimates that about 23 million vehicles worldwide are powered by natural gas. It’s hard to find pure game gas companies, but many energy companies have large natural gas businesses. Major players include Chesapeake Energy Corp., Antero Resources Corp. and Range Resources Corp.

Natural gas prices spiked after Russia’s invasion of Ukraine, as Russia is a major gas producer and has since been subject to heavy sanctions. Many of these companies are enjoying a sharp recovery revenues growth this year due to massive disruptions caused by the COVID-19 pandemic in 2020 and 2021.

Natural gas reserves measured by reference value exchange traded fund (ETF)— First Trust Natural Gas ETF (FCG) — provided an annual trailing total return of 74.0%. This is well above the Russell 1000’s annual total return of -13.1%. These numbers and all dates below are as of September 15, 2022.

Here are the three largest natural gas stocks with the best value, fastest growth and most momentum. As already mentioned, many of these companies are not purely natural gas names, but concentrate more than half of their production (or in the case of medium current companies, throughput on natural gas.

These are natural gas stocks with the lowest 12-month losses price to sales (P/S) ratio.. For companies in the early stages of development or in industries suffering major upheaval, it can be substituted as a rough measure of enterprise value. A business with higher sales could eventually produce more profit when it reaches or returns to profitability. The P/S ratio shows how much you are paying for the stock for every dollar of sales generated.

The most valuable reserves of natural gas
Price ($) Market capitalization (market capitalization) ($B) 12-month trailing P/S ratio
DCP Midstream LP (DCP) 38.11 7.9 0.6
Southwestern Energy Co. (SWN) 7.65 8.5 0.7
CNX Resources Corp. (CNX) 17:32 3.3 1.1

Source: YCharts

  • DCP Midstream LP: DCP Midstream is a midstream energy company that transports, trades, sells and stores natural gas liquids (NGLs) and related products. The company also gathers, compresses, adjusts and processes natural gas. In early August, DCP Midstream reported financial results for the second quarter of 2022 fiscal year (FY), the three-month period ending June 30, 2022. That company reported net income of $383 million attributable to partners, compared with a loss in the prior year, as total operating revenue more than doubled. Net cash from operating activities increased compared to last year’s second quarter results.
  • Southwestern Energy Co.: Southwestern Energy is an independent energy company. The company explores for and produces natural gas, oil and related products. In early August, Southwestern Energy reported financial results for the 2nd quarter of fiscal 2022, the three-month period ending June 30, 2022. The company reported a net income of $1.2 billion, compared to a net loss of $600 million in the prior quarter, as operating income increased more than four times.
  • CNX Resources Corp.: CNX Resources focuses primarily on natural gas and explores, acquires and develops properties in the Appalachian Basin. On July 26, CNX Resources and Dynamis Power Solutions announced the first electric drilling system in the Appalachian Basin. The drill will run entirely on natural gas, which is produced on site.

These are the natural gas stocks with the highest year-over-year sales growth over the past quarter. Growing sales can help investors identify companies that are able to grow revenue organically or through other means, as well as find growing companies that have yet to reach profitability. in addition earnings per share (EPS) may be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, revenue growth can also be potentially misleading in terms of the strength of the business, as growing revenue at money-losing businesses can be detrimental if the company is not on track to achieve profitability. As the natural gas sector has relatively recently turned around after net losses in the past few quarters, we focus on the revenue growth of the companies in the table below.

Fastest growing natural gas reserves
Price ($) Market Cap ($B) Income growth (%)
Coterra Energy Inc. (CTRA) 30.77 24.5 693.8
Earthstone Energy Inc. (YOU ARE) 15.29 1.7 427.0
Chesapeake Energy Corp. (CHK) 103.59 12.5 406.4

Source: YCharts

  • Coterra Energy Inc.: Coterra Energy Inc is a diversified energy company that develops oil and natural gas properties. The company explores for and produces oil, natural gas and NGLs.
  • Earthstone Energy Inc.: Earthstone Energy is an independent oil and gas company. The company is focused on acquiring and developing reserves in the Delaware Basin, Midland Basin and other areas.
  • Chesapeake Energy Corp.: Chesapeake Energy is an oil, gas and NGL company that explores and develops onshore properties. On August 2, the company released its financial results for Q2 2022. Net income available to shareholders is $1.2 billion, as total operating income increased more than fivefold compared to a loss of $400 million in the previous quarter.

These are the natural gas stocks that have had the highest total return over the past 12 months. Companies with total returns above 2,500% were excluded as outliers.

Natural gas reserves with the greatest dynamics
Price ($) Market Cap ($B) 12 month total return (%)
Vermillion Energy Inc. (VET) 24.88 4.1 217.2
Antero Resources Corp. (AR) 39.76 12.2 124.1
Comstock Resources Inc. (CRK) 19.97 4.7 118.5
Russell 1000 ON ON -13.1
First Trust Natural Gas ETF (FCG) ON ON 74.0

Source: YCharts

  • Vermilion Energy Inc.: Vermilion Energy is a Canadian energy producer that explores, develops, acquires and produces oil and natural gas properties. As of August 11th, Vermillion Energy reported a quarterly increase of 33%. cash dividend payments of CA$0.08 ($0.06), due on October 17 for shareholders of record as of September 30.
  • Antero Resources Corp.: Antero Resources is an oil and gas company that explores and develops natural gas, NGL and crude oil properties.
  • Comstock Resources Inc.: Comstock Resources is an oil and gas producer focused on North Louisiana and East Texas in the Haynesville Natural Gas Basin.

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