Natural gas is a fossil fuel that is found in underground rock formations. It is composed of methane, ethane, propane, and butane. Natural gas is important because it is a very efficient fuel source. It is also a very clean-burning fuel. This means that it produces less air pollution than other fossil fuels such as coal and oil. Moving along, natural gas stocks are stocks of companies that explore for, produce, or transport natural gas. For example, in the stock market today, some of the more popular natural gas companies are firms like; Kinder Morgan Inc. (NYSE: KMI), Chevron Corporation (NYSE: CVX), and Cheniere Energy Inc. (NYSEAMERICAN: LNG) just to name a few.
When investing in natural gas stocks, it is important to look for companies with good financial stability, and a strong history of profitability. Natural gas stocks can be a good investment for stock market investors. This is because natural gas prices are expected to continue to rise in the future.
However, there are also some risks associated with investing in natural gas stocks. For instance, the possibility of regulatory changes or new discoveries of natural gas reserves that could lower prices. Considering all of this, here are two top natural gas stocks to watch in the stock market this week.
Natural Gas Stocks To Invest In [Or Avoid] Now
1. DCP Midstream LP (DCP Stock)
First up, DCP Midstream LP (DCP) is a US-based natural gas company. In detail, the company owns, operates, develops, and invests in a diverse portfolio of energy assets. DCP Midstream’s business segments include Natural Gas Liquids (NGL) Pipelines & Processing, Natural Gas Pipelines & Storage, and more. For a sense of scale, DCP is one of the largest natural gas liquid producers. marketers and natural gas processors in the United States. Currently, DCP stockholders enjoy a quarterly dividend amount of $0.43 per common share. This comes out to a current annual dividend yield of 4.64%.
DCP Recent Stock News
Last month, DCP Midstream announced its second quarter of 2022 financial results. In the report, the company posted Q2 2022 earnings of $1.77 per share and revenue of $4.3 billion. Meanwhile, analysts’ consensus earnings estimate was $1.14 per share on revenue of $4.5 billion for the second quarter. In addition, DCP reported revenue growth of 104.7% during the same period, a year prior. What’s more, DCP announced they generated $254 million of exccess-free cash flow for the three months ended June 30, 2022.
Wouter van Kempen, President, and CEO of DCP Midstream commented on the second quarter’s results, “DCP’s record first half results demonstrate the power of our diversified portfolio, as our business model is set up to excel in the current environment. Our strong financial performance has provided the flexibility to increase our distribution, acquire the James Lake strategic bolt-on assets, solidify our position as an investment grade company.“
DCP Stock Chart
In 2022 thus far, DCP stock price has increased by over 31%. Meanwhile, during Wednesday morning’s trading session, shares of DCP are up over 2% at $37.25 per share. With that, will you be adding DCP midstream to your natural gas stocks watchlist today?
[Read More] 3 Oil Stocks To Watch This Week
2. Range Resources (RRC Stock)
Next, Range Resources Corporation (RRC) is an American petroleum and natural gas exploration and production company. The company is a leading independent oil and gas producer with operations focused in the Appalachian Basin and the Southwestern United States. In terms of scale, Range Resources is currently one of the largest producers of dry natural gas in the United States.
RRC Recent Stock News
Last month, Range Resources announced that its Board of Directors has declared a quarterly cash dividend. In detail, the company will be paying out $0.08 on its common stock for the third quarter of 2022. As a result, Range Resources currently has an annual dividend yield for RRC stockholders of 1.33%.
Separate from that, at the end of July, Range Resources announced its most recent second quarter 2022 fiscal results. Diving in, the company announced second-quarter earnings of $1.23 per share. Also, RRC reported revenue for Q2 2022 of $1.2 billion. For clarity, Wall Street’s 2nd quarter 2022 consensus earnings estimate was $1.15 per share and revenue of $938.0 million. Furthermore, RRC also announced a 181.8% increase in revenue, during the same period, in 2021.
Jeff Ventura, Range Resources’s CEO said this about Q2 2022’s performance, “In the midst of a global energy crisis, the need for oil and gas production from the United States is more important than ever. In order for U.S. supply to meet growing domestic and global demand, however, there must be support for the required infrastructure, including permit approvals and construction of pipelines, compression, processing facilities and LNG export terminals. Range is well positioned to serve and benefit from this call on American natural gas supply given our access to multiple domestic and international markets for natural gas and NGLs.“
RRC Stock Chart
Year-to-date, RRC has outperformed the broader markets so far up 30.34%. On Wednesday morning, shares of RRC stock are up a modest 1.01% at $24.02 per share. Given the buzz around natural gas in the United States right now, do you think Range Resources (RRC) is a top natural gas stock to invest in right now?