Natural gas is a fossil fuel that is primarily methane. Natural gas can be used for a variety of purposes, including electricity generation, heating, and cooking. Another use case for natural gas is feedstock for the production of chemicals, plastics, and other products.
Natural gas stocks refer to the stocks of companies that engage in the exploration, production, transportation, and distribution of natural gas. These companies may own and operate natural gas fields, pipelines, and other infrastructure needed to extract and deliver natural gas to consumers. Investors can purchase shares of natural gas stocks as a way to invest in the natural gas industry.
The performance of natural gas stocks generally ties to the price of natural gas and the demand for natural gas. Factors that can influence the price of natural gas and demand for natural gas include changes in the global economy, weather patterns, and advances in technology that affect the production and use of natural gas. Considering this, let’s look at three natural gas stocks to watch in the stock market in 2023.
Natural Gas Stocks To Buy [Or Sell] In 2023
- Pioneer Natural Resources Company (NYSE: PXD)
- Diamondback Energy Inc. (NASDAQ: FANG)
- Southwestern Energy Company (NYSE: SWN)
Pioneer Natural Resources (PXD Stock)
First up, Pioneer Natural Resources (PXD) is an American oil and natural gas exploration and production company. The company’s operations include the exploration and production of oil, natural gas, and natural gas liquids.
Just back in October, Pioneer Natural Resources reported its third-quarter 2022 financial and operating results. In detail, the company reported 3rd quarter 2022 earnings of $7.48 per share and revenue of $6.1 billion. These revenue figures reflect a 36.5% increase versus the same period, in 2021. Additionally, during Q3 2022, Pioneer reported that it repurchased $500M of shares.
As it stands, PXD currently offers its shareholders an annual dividend yield of 11.46%. Meanwhile, in 2022 so far, shares of PXD stock are up 21.69%, outperforming the broader markets year-to-date. On Friday, Pioneer Natural Recourses stock is trading higher on the day by 3.36% at $227.54 a share.
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Diamondback Energy (FANG Stock)
Next, Diamondback Energy (FANG) is an American oil and natural gas exploration and production company. Specifically, the company focuses on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Currently, FANG stock has an annual dividend yield for shareholders of 2.20%.
This month, the company announced it has been added to the Nasdaq 100 Index. For the uninitiated, the Nasdaq-100 Index is the top 100 biggest domestic and international non-financial companies that trade on the Nasdaq exchange.
Furthermore, Travis Stice, Chairman, and CEO of Diamondback comments, “Diamondback is proud and excited to be included in the Nasdaq-100. We have been listed on the Nasdaq exchange since the Company went public as a small-cap producer in October 2012. To achieve this honor in just over ten years as a public company is a testament to our employees and their commitment to building this Company into the significant Texas-based oil producer we are today.“
In 2022 year-to-date shares of FANG stock have jumped by 22.13%, which outperforms the broader markets YTD. Additionally, on Friday, Diamondback Energy stock is up another 2.79% on the day at $136.63 a share.
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Southwestern Energy (SWN Stock)
Last but not least, Southwestern Energy (SWN) is an American energy company. In brief, the company engages in the exploration, development, and production of natural gas, oil, and natural gas liquids. Back in October, Southwestern Energy reported its Q3 2022 financial results.
Specifically, the company posted third-quarter 2022 earnings of $0.32 per share, along with revenue for the quarter of $4.5 billion. Additionally, the company also reported that revenue advanced by 184.2% versus the same period, in 2021.
Furthermore, Bill Way, Southwestern Energy President, and CEO said this about the quarter, “During the third quarter, the Company executed on its plan, progressed debt repayment and achieved our target leverage range. This was complemented by continued return of capital to our shareholders, bringing total share repurchases to date to 10% of the authorized amount.“
YTD shares of SWN Stock are up 29.64%, outperforming the overall markets in 2022 thus far. Meanwhile, during Friday’s trading action, SWN stock is up another 3.31% on the day, currently trading at $6.08 a share.
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