Energy News Today

9 Ugly Natural Gas Stocks to Keep on Your Watchlist


The events of 2020 have provided many buying opportunities for savvy investors. I’ve put together a number of lists chocked with stocks that my Portfolio Grader says are positioned for post-pandemic gains. Here are seven pharmaceutical stocks, for example. Or how about seven manufacturing stocks to snap up before they recover?

What about the oil industry? It’s been hammered in 2020. A brutal price war combined with the novel coronavirus pandemic has resulted in historic low oil prices, bargain basement stock prices and a growing list of bankruptcies. Natural gas companies are struggling too.

But it’s possible the situation for this sector may not be as dire as oil’s in the long term. There are a handful of stocks worth keeping an eye on, just in case the situation begins to improve. These 9 natural gas stocks should be on your watchlist:

  • Cheniere Energy (NYSE:LNG)
  • Magellan Midstream Partners, L.P. (NYSE:MMP)
  • EQT Corporation (NYSE:EQT)
  • Phillips 66 Partners LP (NYSE:PSXP)
  • Pembina Pipeline Corp (NYSE:PBA)
  • Enterprise Products Partners L.P. (NYSE:EPD)
  • Apache Corporation (NASDAQ:APA)
  • Cabot Oil & Gas Corporation (NYSE:COG)
  • Royal Dutch Shell plc ADR Class A (NYSE:RDS.A)

To be clear, natural gas stocks are full of risk. Despite their high fundamental and quantitative ratings on my Portfolio Grader, these are all D-rated stocks, and the sector as a whole is still in a very tough spot. Less than two weeks ago, Chesapeake Energy (OTCMKTS:CHKAQ) — one of the biggest U.S. shale gas producers — filed for bankruptcy. And if the country’s sixth largest gas producer is on the ropes, that’s a terrible omen.

However, the decline in production may correct the chronic over-supply that’s plagued the industry, while there’s still hope that liquid natural gas (LNG) exports could eventually open up additional markets.

If you’re looking for energy stocks that are positioned to be big winners going forward, check out my list of “7 Environmental Energy Stocks to Watch.” But if you feel there’s still a play to made in natural gas stocks and have a stomach for risk, these nine are worth keeping an eye on.

Cheniere Energy (LNG)

Source: IgorGolovniov / Shutterstock.com

Cheniere Energy earns the sole A-rating among gas stocks on this list, and it scores that A for its fundamental grade. A pioneer in the export of liquid natural gas (thus the ticker), Cheniere Energy is betting big on the demand for American LNG exports in the European and Asian markets. With coal use on the decline, that’s not an unreasonable bet.

In its first quarter earnings, LNG stock reported revenue up 22% year-over-year, with export volume up 46%. Despite the circumstances, Cheniere Energy maintained its full-year 2020 guidance and even spent $155 million to repurchase 2.9 million shares of common stock. 

LNG stock had been on the path to recovery from a massive crash in 2015 before stalling last summer. Currently trading at $50.51, Cheniere is crawling…



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2020-07-10 17:03:24

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