The energy sector is known for its volatility, but 2014 was a bit more than most investors expected. However, the upheaval from the plunge in crude oil prices made valuations in the sector pretty compelling. That's not just the case for oil stocks, but solar and natural gas stocks are looking pretty compelling these days too. So, its not surprising that when we asked our analysts which energy stock they liked best heading into 2015, we got answers that were a cross section of the sector. Here are the energy stocks that they think will be among the best to own in 2015.
That makes it a great energy stock to buy, especially for investors interested in the long-term future of natural gas.
Tyler Crowe: Some might say that being a fan of Big Oil stocks right now is a sign of being afraid of the recent price slumps. Sure, the vertical integration of these companies makes the bad times easier to stomach. But, the real reason I'm bullish on Big Oil right now is because you can buy these rock-solid companies for a bargain. Of the five companies most widely known in Big Oil, I'm going to have to go with Exxonmobil right now because of the current valuation discount. Today, Exxonmobil is the only company among its peers that is actually trading below its average 10-year historical valuations.
Source: S&P Capital IQ.
Exxonmobil will probably never wow you with huge earnings growth numbers from year to year, and its growth plans over the next few years look modest compared to some of its peers. But considering the company has given back over $130 billion to shareholders in dividends and buybacks in the past 5 years - almost all paid for with free cash flow - today is a great time to get in on this capital generating machine.
Investor Takeaway
As we head into 2015, the energy sector appears to be filled with bargains. Not only do we find it filled with beaten-down oil stocks like ExxonMobil, but in solar and natural gas stocks trading at discounts too. That means 2015 could be a very good year to go bargain hunting for energy stocks to own for the long-term.
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The article Best Energy Stocks for 2015 originally appeared on Fool.com.
Jason Hall has no position in any stocks mentioned. Matt DiLallo has no position in any stocks mentioned. Tyler Crowe has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
