Are These The Best Natural Gas Stocks To Buy In The Stock Market Today?
Natural gas stocks are a type of energy stock that represents ownership in a company involved in the production, transportation, or distribution of natural gas. For starters, natural gas is used for a variety of purposes, including electricity generation, heating, and cooking. As a result, natural gas stocks may be attractive to stock market investors who are seeking to profit from the growing demand for natural gas. Meanwhile, the energy sector has outperformed the broader markets so far in 2022. This is evident with natural gas companies such as EQT Corporation (NYSE: EQT) and ExxonMobil Corporation (NYSE: XOM). So far this year both companies have seen their share prices increase by 126.35% and 55.87% respectively.
The demand for natural gas has been rising in recent years due to the growing popularity of natural gas-fired power plants. Natural gas power plants are more efficient than coal-fired power plants and emit fewer pollutants. As a result, many countries are turning to natural gas as a cleaner alternative to coal. This shift is expected to continue in the coming years, which could lead to higher prices for natural gas and profits for companies involved in its production and distribution.
Natural gas stocks may also appeal to investors who are looking for exposure to the energy sector. The energy sector is often viewed as a less risky investment than other sectors, such as technology or finance. As a result, natural gas stocks may provide investors with stability and potential long-term growth. If you’re keen on investing in natural gas stocks, here are three for your watchlist this week.
Natural Gas Stocks To Buy [Or Avoid] Right Now
- Antero Resources Corporation (NYSE: AR)
- Range Resources Corporation (NYSE: RRC)
- Phillips 66 (NYSE: PSX)
Antero Resources (AR Stock)
First, Antero Resources Corporation (AR) is an American natural gas and oil company based in Denver, Colorado. Antero is engaged in the development, production, and acquisition of natural gas, natural gas liquids (NGLs), and oil properties. Back in July, the company reported a miss for its most recent Q2 2022 financial results. In detail, AR reported Q2 2022 earnings of $1.69 per share and revenue of $1.32 billion. This came in under analysts’ consensus estimates of $1.90 earnings per share, and revenue of $1.7 billion. Additionally, Antero Resources was able to purchase an amount totaling $247 million of shares during the second quarter.
Michael Kennedy, Chief Financial Officer of Antero Resources commented in the letter to shareholders, “During the second quarter, we accelerated our return of capital program by purchasing approximately $250 million of shares. At the same time, we reduced debt by nearly $400 million resulting in leverage of just 0.6x. As previously communicated, we intend to increase our return of capital during the second half of 2022 to greater than 50% of Free Cash Flow. Based on today’s commodity prices, we anticipate full-year 2022 shareholder returns to be at the high end of our previously announced target of 25% to 50% of 2022 Free Cash Flow.”
Aside from this, shares of AR stock have increased by over 129% so far in 2022. On Monday morning, AR stock is currently trading up another 1.67% at $40.74 per share. With this in mind, is AR stock a good natural gas stock to buy right now?
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Range Resources (RRC Stock)
Next, Range Resources Corporation (RRC) is an American oil and gas company with headquarters in Fort Worth, Texas. The company focuses on the exploration, development, and production of natural gas and oil properties in the United States. At the end of last month, the company’s Board Of Directors declared a quarterly cash dividend of $0.08 on its common stock for the 3rd quarter. As a result, shareholders enjoy an annual dividend yield of 1.00%.
What’s more, back in July Range Resources reported its second quarter 2022 financial results. Diving in, the energy company posted revenue of $1.2 billion and earnings of $1.23 per share. For context, Wall Street’s analysts’ estimates for the quarter were earnings of $1.15 per share and revenue of $938.0 million. In addition, Range Resources reported a 181.8% increase in revenue during the same period, a year prior. Also in the report, the company announced that they had repurchased 4.5 million shares at an average of $28.85 per share, totaling approximately $129.82 million in share buybacks for the quarter.
Furthermore, CEO of Range Resources Jeff Ventura had this to say in the release to shareholders, “As a result of increased commodity prices and continued efficient operations, Range delivered record free cash flow in the second quarter, allowing us to further reduce outstanding debt while increasing returns of capital to shareholders. At the end of the quarter, Range’s leverage ratio was a record low for the Company at 1.2x, and as we rapidly approach our long-term balance sheet targets over the coming quarters, we will be well positioned to return additional capital to shareholders in the form of dividends and continued share repurchases.”
Following this, year-to-date RRC stock has jumped over 74% outperforming the broader markets so far in 2022. As of Monday morning, shares of Range Resources stock are up another 3% at $31.99 per share. With this in mind, will you be adding RRC stock to your radar right now?
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Phillips 66 (PSX Stock)
Phillips 66 (PSX) is an American multinational energy company. The company focuses on the exploration, production, refining, marketing, and transportation of oil and natural gas. As well as the manufacture and sale of petrochemical products. Currently, Phillips 66 has an annual dividend yield of 4.30%. Moving along, in July the company reported a beat for its most recent Q2 2022 financial results.
In the report, Phillips 66 posted second quarter 2022 earnings per share of $6.77, on revenue of $49.3 billion. This came in better than analysts’ consensus estimates of $5.92 per share, and revenue of $43.2 billion for Q2. In addition, Phillips 66 reported revenue growth of 76.8% during the same period, in 2021. Also, the company returned approximately $533 million to shareholders through dividends and share repurchases.
Moreover, Mark Lashier, President, and CEO of Phillips 66 said this about the quarter, “During the second quarter, we paid down $1.5 billion of debt, increased our dividend and resumed share repurchases. Additionally, we are transforming our business to achieve sustained annual cost savings of at least $700 million to ensure we remain competitive in any market environment. We will continue to prioritize operating excellence and disciplined capital allocation.” So far in 2022, PSX stock is up over 19% outperforming the broader markets. As of Monday morning’s trading session, shares of PSX stock are up over 2% at $90.60 per share. All in all, will you be keeping a closer eye on Phillips 66 stock in the stock market today?