3 Energy Stocks To Brighten Your Portfolio
Cecil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The demand for energy is outstripping its supply. Most of the oil and gas reserves that were easily accessible have been depleted, and energy companies are now looking at new inventions to help dig for the proverbial black gold. More expensive endeavors, such as hydraulic fracking and deep sea drilling, are the primary sources of new discoveries. Even with all the new discoveries, a majority of supply for the world's energy requirements still currently emanate from the volatile Middle East. Any disruption in the supply from the Middle East bodes well for U. S. Energy companies covered in this article, as oil and gas reserves will rise in value substantially.
Clean Energy (NASDAQ: CLNE), together with its subsidiaries, provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The company is trading around 49% below its 52-week high and has a 26% upside potential based on the consensus mean target price of $15.89 for the company. The company reported earnings earlier this month. EPS was in-line with the street's estimates and the company beat on revenues. Revenue for the third quarter ended September 30 was $91.5 million, up from $72.1 million in the third quarter of 2011. For the nine months ending September 30, revenue totaled $234.9 million, up from $206.5 million a year ago.
Fundamentally, the stock is pretty strong. The company’s expected EPS growth rate for the next five years is 27%, and sales are up 27% quarter over quarter. A key factor to note is that insider ownership has risen 45.51% over the past six months.
Halliburton (NYSE: HAL) is one of the world's largest oilfield services companies with operations in more than 70 countries. The company is trading 25% below its 52-week high and has 43% upside potential based on the consensus mean target price of $42.68 for the company.
The company has a forward P/E of 9.87 and pays a dividend with a yield of over 1.18%. Halliburton's expected EPS growth rate for next five years is 19.30%. The current net profit margin is 10.26%, which is fairly impressive. Halliburton's PEG ratio is .50.
The company’s profit streams are stable and it has the added benefit of being one of the oldest and most trusted oil service companies in the business. According to the International Energy Agency, the US is going to become the largest producer of oil by 2017, which will be an incredible opportunity for Halliburton.
Cheniere Energy (NYSEMKT: LNG) is a Houston-based energy company primarily engaged in LNG-related businesses. The company is trading 25% below its 52-week high and has 54% upside based on the consensus mean target price of $22.00 for the company. Earnings per share were up 36% quarter over quarter and insider ownership is up 71% over the past six months. Additionally, many fundamentals are improving incrementally.
Most of the company’s opportunities will emerge in Asia where the price of natural gas is almost double than compared to the US. The challenge for the company will be to ship natural gas, which needs to be cooled, unlike crude oil that can be shipped fairly easily. Cheniere received permission from the US Department of Energy to export LNG produced in North America from its Sabine Pass terminal. The company had already received permission to re-export imported LNG. This will help the company’s long term growth and is one of the primary reasons why you should buy Cheniere Energy.
ceciljohn2002 has no positions in the stocks mentioned above. The Motley Fool owns shares of Clean Energy Fuels and Halliburton Company. Motley Fool newsletter services recommend Clean Energy Fuels and Halliburton Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!