Profit From The Energy Boom — A Guide To Finding The Best Performing Energy Stocks

In this article, we'll discuss the top performing energy stocks.

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

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When it comes to investing, energy stocks provide a unique and potentially lucrative opportunity for investors. From oil and gas to clean energy and renewables, energy stocks can be an incredibly attractive option for investors looking to diversify their stock portfolio.

With the boom in energy stocks on the market, there's now a variety of energy stocks to choose from. In this article, we'll discuss the top performing energy stocks and what investors need to know in order to start trading them.

The Fundamentals

What Are Energy Stocks?

When deciding where to invest your hard-earned money, energy stocks may be a wise choice. Energy stocks are stocks issued by companies that specialize in energy production and distribution, such as oil and gas producers, utilities, and renewable energy companies.

Energy stocks can provide investors with a range of opportunities and benefits, including the potential for both short-term gains and long-term wealth.

Fossil fuel producers, such as Chevron and ExxonMobil, make up the lion’s share of the energy stock market. These companies are involved in the exploration and production of crude oil and natural gas, which are the most widely used sources of energy in the world.

The stock prices of these companies can rise and fall with changes in the price of crude oil and gas, making them an attractive option for investors looking for short-term gains.

Utility stocks are issued by companies that produce, distribute, and sell electricity and natural gas to consumers. These companies typically have long-term contracts with customers, making them a relatively stable source of income. As such, they are often considered a safe option for long-term investors looking for steady growth.

Renewable energy companies, such as solar and wind producers, are becoming increasingly attractive investments as the world shifts toward environmentally friendly sources of energy.

They can however be somewhat volatile, as technological advancements and government subsidies can have a significant impact on their share prices. However, these stocks offer investors the potential for significant growth over the long term.

Investing in energy stocks can be a great way to diversify your portfolio and maximize your return on investment. With the right research and guidance, energy stocks can offer investors both short-term gains and long-term wealth.

Why Invest In The Energy Sector?

Each of the different types of energy sources have their own unique set of pros and cons when it comes to investing, so understanding them is crucial before deciding which type of energy stock to invest in.

Renewable energy stocks are those that are derived from natural sources such as wind, solar, geothermal and hydropower. These sources of energy are becoming increasingly popular and the industry is growing at a rapid rate.

The major benefit of investing in renewable energy stocks is that they are seen as much more environmentally friendly and sustainable than energy sources derived from fossil fuels. They also tend to be much less expensive to operate which can result in higher profitability over the long term.

On the other hand, investing in renewable energy stocks can be risky as the industry is still in its early stages. There is also some uncertainty regarding government subsidies or incentives to incentivize people to invest in the renewable energy sector.

Additionally, renewable energy stocks tend to be more volatile than traditional energy stocks, meaning that they can be riskier investments.

Fossil fuel stocks are more traditional energy sources and have been around for much longer than renewable energy sources. That said, investing in traditional energy stocks also has its own set of pros and cons.

On the positive side, these stocks offer more stability than renewable energy stocks and are less volatile. This means that the risk of investing in traditional energy stocks is lower than investing in renewable energy stocks.

However, investing in traditional energy stocks comes with its own set of drawbacks.

These stocks can be more sensitive to changes in the price of oil, gas, etc. Additionally, they're reliant on finite sources of energy, so there is always a risk that the supply of these commodities will run out. This means that traditional energy stocks may not be as lucrative as renewable energy stocks in the long run.

The Best Performing Energy Stocks Of 2024

As an investor, you're always looking for bright spots in the market to invest your money. And when it comes to energy stocks, you want to know which ones are the most popular and best performing.

That's why we're here to give you the scoop on the best energy stocks of the year. With energy technology and alternative energy sources on the rise, energy stocks can be a great way to diversify your portfolio and utilise new economic opportunities.

The top five energy stocks of 2024 include:

  • ConocoPhillips (COP)
  • Chevron Corporation (CVX)
  • Exxon Mobil Corporation (XOM)
  • Royal Dutch Shell Plc (RYDAF)
  • BP Plc (BP)

All of these stocks have outperformed the market in the last 12 months and offer strong potential for long-term growth.

1. COP

As a leading independent producer of oil and gas, ConocoPhillips is committed to providing safe and reliable energy resources to meet global needs.

Additionally, they're integrated throughout the world’s energy industry. With core operations in North America, Europe, and Asia Pacific, the company has presence in all major regions with access to some of the world’s most innovative energy technologies.

2. CVX

Chevron Corporation is one of the world's largest traditional energy producers, with a portfolio of assets spanning more than a dozen countries. The company has seen an increase in profits in recent years thanks to increased production, new technology, and aggressive cost-cutting strategies. Chevron is a safe bet for long-term investors, as the company will likely see strong returns in 2024.

3. XOM

Exxon Mobil Corporation, the world's largest publicly traded oil and gas company, is known for its stability and diversity, having grown from a single-state oil company to a global enterprise. The stock has seen steady appreciation in the last year, along with growth in both earnings and production.

4. RYDAF

Royal Dutch Shell Plc is one of the world's largest energy companies, and its stock has seen impressive returns over the last twelve months. With a robust portfolio of oil and alternative energy assets, the liquefied natural gas producers have a secure foothold in the industry and are expected to remain profitable for years to come.

5. BP

BP Plc is another major player in the oil and gas industry, and it has weathered the storms of the pandemic better than most. The energy company has recently made huge investments in alternative energy sources, and its stock has been on a tear in recent years. With its long-term prospects looking strong, BP is a great bet for investors looking for long-term growth.

All of these energy stocks are great investments and offer significant potential for future growth. With technological advances, valuable assets, and diverse portfolios, these stocks should remain attractive investments for the next few years. So if you're looking for a smart way to diversify your portfolio, consider these five energy stocks for 2024.

Strategies For An Income-Generating Energy Stock Portfolio

Investing in energy stocks can be a great way to diversify your portfolio and generate reliable income. However, before you jump in and invest in the first energy stock you see, there are some things you should consider.

Here are some tips to help you choose the best energy stocks for consistent growth:

Consistent Dividends

The first thing you should do is look for stocks with a strong track record of dividend payments. This ultimately gives you a good idea of how reliable the company is, and if they are likely to continue paying out dividends in the future.

Diversification

In addition to looking for stocks with a strong track record of dividend payments, you should also ensure you diversify your portfolio by investing in multiple energy sectors. These sectors can include nuclear and alternative energy sources such as wind and solar panels.

Future Potential

When investing in energy stocks, you should also consider the company’s growth potential. Companies with potential for future growth are usually more attractive to investors, as growth usually leads to higher dividend payments.

Managing Volatility

Finally, you should also keep an eye on the industry in general. The energy industry is highly volatile and prone to rapid changes. Keeping an eye on both the industry and your investments can help you make the best decisions for your portfolio.

Monitoring the Market: Evaluating Current & Future Trends In Energy Stocks

Exploring The Benefits & Risks Of Fluctuating Energy Prices

The energy market is an increasingly volatile and unpredictable place to invest your money, as shifts in global demand and supply can have wide-reaching impacts on the price of oil and gas.

Understanding the risks and rewards of investing in the energy markets is key for any investor who is looking to make money through the trading of commodities.

Volatility has always been present in the energy market, with prices for both oil and gas varying significantly from one year to the next. Over the last decade, however, this volatility has become much more pronounced with the emergence of new technologies such as fracking, as well as the proliferation of renewable energy sources, which have caused wild fluctuations in prices.

For investors, volatility can mean huge potential rewards — but it can also mean extremely high risks. On the one hand, if you're able to predict price movements correctly and buy or sell at the right time, the returns can be immense.

On the other hand, market volatility can also drastically reduce the value of your investments and could result in huge losses.

The key to successfully investing in the energy market is to understand the factors that influence prices and how they might affect your investments. Global events such as natural disasters, political tensions, and economic recessions can all cause shifts in the demand for energy and can have a dramatic effect on prices.

Additionally, changes in the supply of energy commodities, such as the development of new fracking techniques or the increase in renewable energy sources, can also cause wild fluctuations in prices.

While the potential rewards of investing in the energy market can be high, so too are the risks. Those looking to make money in the energy market must be willing to accept the volatility and be ready to act in an informed and decisive manner if prices change unexpectedly.

Renewable VS Traditional Energy Stocks

When it comes to investing, understanding the future of energy is an important factor when deciding which stocks to invest in.

Renewable energy stocks have become increasingly popular, with prices on the rise due in part to the environmental and social benefits they offer. At the same time, traditional energy stocks still remain a strong choice. So which option is better for the future of investors?

Renewable

Renewable energy stocks are a better choice for investors who want to benefit from the rapidly growing demand for renewable energy sources. These stocks can provide solid returns in the long run as renewable energy continues to make up a larger portion of global energy consumption.

Additionally, renewable energy stocks benefit from government subsidies, which can help to make them more profitable than traditional energy stocks.

Finally, renewable energy investments can also benefit from reduced carbon emissions, improving the environment and offering a positive social benefit as well.

Traditional

On the other hand, traditional energy stocks offer their own advantages. They are highly liquid, meaning they can be sold quickly with minimal transaction costs. Furthermore, traditional energy sources have been around for centuries and remain in high demand.

While oil prices have been volatile over the last few years, they are still profitable investments for those looking for short-term gains. Additionally, traditional energy stocks tend to be less risky than those of renewable energy stocks, providing investors with more stability.

Which Is Right For Me?

When choosing between renewable energy stocks and traditional energy stocks, investors should consider their risk tolerance, time-horizon, and investment goals. Renewable energy stocks have the potential to provide higher returns, but also involve more risk.

Traditional energy stocks, meanwhile, tend to be more stable but may not provide the same level of returns. Ultimately, the decision is up to individual investors to determine which stocks will best meet their financial objectives.

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