Stocks of the natural gas-producing and natural gas-related companies are termed as gas stocks. Owing to the growing demand for natural gas as a cleaner fossil fuel than other alternatives, gas stocks offer excellent opportunities for investment. Natural gas produces much fewer greenhouse gas emissions than other fossil fuels, like coal. With so many transportation options out there, gas stocks can be very interesting to look at.
The demand for natural gas is expected to grow at an average annual rate of 1.7% through 2040. This will mean an increase in demand by 50% compared to the 2018 level. Therefore, investment in gas stocks of oil and gas producers, liquefied natural gas producers, and natural gas pipeline operators has a bright future.
Ticker | Company Name | Last Price | 1-Year Return | Market Cap |
|---|---|---|---|---|
| AGR | Avangrid, Inc. | $36.14 | -22.74% | 1.2B |
| ATO | Atmos Energy Corporation | $136.63 | 15.44% | 21.2B |
| CLNE | Clean Energy Fuels Corp. | $3.02 | -12.21% | 674.8M |
| CNP | CenterPoint Energy, Inc. | $30.87 | 5.61% | 20.1B |
| CPK | Chesapeake Utilities Corporation | $118.66 | 15.06% | 2.7B |
| NGG | National Grid plc | $58.60 | -14.95% | 45.1B |
| NJR | New Jersey Resources Corporation | $45.66 | 3.87% | 4.6B |
| NWN | Northwest Natural Holding Company | $38.58 | -1.56% | 1.5B |
| OGS | ONE Gas, Inc. | $68.05 | 7.98% | 3.9B |
| OKE | ONEOK, Inc. | $101.61 | 44.35% | 59.2B |
| RGCO | RGC Resources, Inc. | $19.37 | 0.73% | 198.8M |
| SJI | South Jersey Industries, Inc. | #N/A | #N/A | #N/A |
| SPH | Suburban Propane Partners, L.P. | $17.64 | 0.11% | 1.1B |
| SR | Spire Inc. | $66.50 | 7.71% | 3.8B |
| SWX | Southwest Gas Holdings, Inc. | $70.76 | 12.09% | 5.1B |
| TGS | Transportadora de Gas del Sur S.A. | $33.25 | 142.52% | 2.6B |
| LNG | Cheniere Energy | $223.51 | 33.57% | 50.1B |
| EQT | EQT | $48.15 | 26.48% | 28.7B |
| KMI | Kinder Morgan | $27.81 | 54.07% | 61.8B |
| WMB | Williams Companies | $55.55 | 56.83% | 67.7B |
| OGZPY | Gazprom | #N/A | #N/A | #N/A |
| XOM | Exxon Mobil | $108.75 | 9.11% | 478.0B |
| CHK | Chesapeake | $2.84 | -17.92% | 75.1B |
| SWN | Southwestern Energy | $1,936.61 | #N/A | 10.6B |
| COG | Cabot Oil & Gas | $38.37 | -24.74% | 16.1M |
| BP | BP | $31.83 | -8.77% | 67.5B |
| AR | Antero Resources | $36.68 | 56.48% | 11.4B |
| RRC | Range Resources | $36.78 | 19.42% | 8.9B |
| CNX | CNX Resources | $30.49 | 49.98% | 4.6B |
| GPOR | Gulfport Energy | $186.07 | 46.72% | 3.3B |
| PSX | Phillips 66 | $115.19 | -13.53% | 47.6B |
| UNG | United States Natural Gas Fund | $15.99 | -38.31% | |
| BOIL | ProShares Ultra Bloomberg Natural Gas | $52.21 | -72.69% | |
| KOLD | ProShares UltraShort Bloomberg Natural Gas | $44.46 | -36.52% | |
| UNL | United States 12 Month Natural Gas Fund | $8.01 | -16.91% | |
| GAZ | iPath Series B Bloomberg Natural Gas Subindex Total Return ETN | #N/A | #N/A |
Examples of Gas Stocks
Gas stocks refer to companies that explore, extract, and produce natural gas. Investing in gas stocks can be a good way to gain exposure to the energy sector, as natural gas is a widely used fuel source for power generation, heating, and transportation.
Here are some of the top gas stocks to consider:
- Chesapeake Energy (CHK) – Chesapeake Energy is one of the largest natural gas producers in the United States, with operations in several key shale plays such as the Marcellus, Barnett, and Haynesville. The company has a diverse portfolio of assets and a strong track record of growth, making it a solid choice for investors looking for exposure to the natural gas sector.
- Devon Energy (DVN) – Devon Energy is another leading natural gas producer in the US, with a focus on unconventional resources such as shale and tight gas. The company has a strong balance sheet and a track record of delivering consistent returns to shareholders.
- EQT Corporation (EQT) – EQT Corporation is one of the largest natural gas producers in the US, with a focus on the Marcellus and Utica shale plays. The company has a strong track record of growth and a diversified portfolio of assets, making it a solid choice for investors looking to gain exposure to the natural gas sector.
- Encana (ECA) – Encana is a leading natural gas producer in North America, with operations in several key shale plays such as the Montney, Duvernay, and Eagle Ford. The company has a strong balance sheet and a track record of delivering consistent returns to shareholders, making it a solid choice for investors looking for exposure to the natural gas sector.
- ConocoPhillips (COP) – ConocoPhillips is a large, diversified energy company with a significant presence in the natural gas sector. The company has a strong balance sheet and a track record of delivering consistent returns to shareholders, making it a solid choice for investors looking for exposure to the energy sector.
It’s important to note that investing in gas stocks carries inherent risk, and investors should conduct their own research and consider their own risk tolerance before investing. Additionally, the market conditions may change and some of the above mentioned companies might not perform as well in the future.
About the Gas Industry
The natural gas industry is a complex and dynamic sector that involves several different stages and players, including exploration and production companies, transportation and distribution companies, and marketing and trading companies.
Exploration and production companies, also known as upstream companies, are responsible for the discovery and extraction of natural gas. These companies typically use a combination of traditional exploration methods such as geological surveys and drilling, as well as newer technologies such as hydraulic fracturing (fracking) and horizontal drilling, to extract natural gas from underground reserves. Once natural gas is discovered, exploration and production companies then extract the gas and prepare it for transportation and distribution.
Transportation and distribution companies, also known as midstream companies, are responsible for the transportation and distribution of natural gas to consumers. These companies typically operate pipelines and other infrastructure that is used to transport natural gas from production sites to storage facilities, as well as to consumers such as power plants and industrial facilities. Some midstream companies also operate storage facilities, which are used to store natural gas until it is needed.
Marketing and trading companies, also known as downstream companies, are responsible for the sale and marketing of natural gas to end users. These companies typically purchase natural gas from exploration and production companies or transportation and distribution companies and then sell it to consumers such as power plants, industrial facilities, and residential and commercial customers.
The natural gas industry is also subject to significant regulatory oversight, with federal, state, and local governments all having a role in regulating various aspects of the industry, such as drilling permits, pipeline construction and operation, and the sale and distribution of natural gas.
In addition to the traditional players in the industry, there are also financial institutions and investment firms that play a role in the natural gas industry by providing capital to exploration and production companies, and by trading natural gas futures and options contracts.
Overall, the natural gas industry is a complex and dynamic sector that involves many different stages and players, each with their own role to play in the extraction, transportation, and distribution of natural gas.
Factors to Consider Before Investing in Gas Stocks
Investors must remember that the growth and development of gas companies and gas stocks are affected by the macroeconomic environment to a large extent. New regulations, government policies, trade relationships, and many other factors impact the production costs and production efficiency of natural gas companies.
Therefore, investors must consider the overall economic conditions in addition to the local parameters surrounding the specific company and stock. The fundamental analysis must include the revenues and earnings growth, cash flow generation, production efficiency, cost of production, number of contracts, and the comprehensive business model of the companies.
Additionally, investors must also consider that the success of natural gas stocks is inversely correlated to the performance of renewable energy companies. Gas stocks suffer a setback due to the growing pace of renewable energy resources.
Which Gas Stocks Should I Buy?
We have compiled a list of the best gas stocks and ETFs for you to select from. The listed gas stocks have been around for a long time and have demonstrated solid growth, the sustainability of revenues, and a large number of fixed contracts.
Gas stocks follow a low-risk profile with strong returns and above-average dividend yield. Therefore, they become suitable investments for both short-term income-seeking investors and long-term returns-seeking ones.
