Energy stocks have underperformed this year, with the S&P 500’s energy sector up only 1% compared to its 25% gain overall. However, experts predict a better performance from these top energy companies next year.
Chevron (CVX) is expected to deliver strong returns due to its diversified energy portfolio and rock-solid balance sheet. As an integrated energy company, Chevron has exposure across the energy sector, which helps soften industry peaks and valleys. Its low debt-to-equity ratio of 0.2 also gives it flexibility to take on leverage during downturns.
Enterprise Products Partners (EPD) is another top pick, driven by its midstream business and recent acquisition of Pinon Midstream. The company’s organic expansion projects are expected to drive cash flow growth next year, and its acquisition will add $0.03 per unit in 2025.
Occidental Petroleum (OXY) is a compelling bounce-back candidate for 2025 due to management’s focus on cutting down debt. Despite taking a hit in 2024, the company has made significant progress in reducing debt and generating strong cash flow. Its growth catalysts, such as its low-carbon ventures business and chemicals business, make it a value stock worth betting on.
These three energy companies are expected to drive returns for investors in 2025, making them top picks for energy stocks.
Source: https://www.fool.com/investing/2024/12/29/3-top-energy-stocks-to-buy-in-2025