Top oil and gas stocks this month include YPF SA, Weatherford International PLC, and Vista Energy S.A.B. de CV, the share prices of which h✱ave more than quadrupled in the past year.

Industrial stocks, as represented by the Energy Select Sector SPDR ETF (XLE), have risen 19% in the past 12 months compared with a 15% gain for the 澳洲幸运5官方开奖结果体彩网:Russell 1000, which tracks the largest🦹-capitalizaꦉtion U.S. stocks.

Here are the top three industrial stocks each with the best value, the fastest growth, and the most momentum. All data is as of July 14.

Best Value Oil and Gas Stocks

These are the oil and gas stocks with the lowest 澳洲幸运5官方开奖结果体彩网:12-month trailing 澳洲幸运5官方开奖结果体彩网:price-to-earnings (P/E) ratio. A low P/E ratio shows that you're paying less for each dollar of profit generated. Profit can be returned to shareholders in the form of 澳洲幸运5官方开奖结果体彩网:dividends and share buybacks.

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• Saturn Oil & Gas Inc.: An oil and natural gas exploration company with properties located in western Canada. The company also trades 澳洲幸运5官方开奖结果体彩网:over-the-counter under the ticker symbol (OILSF).
• Obsidian Energy Ltd.: It explores, develops, and produces petroleum resources around Alberta, Canada. On May 4, the company released its first-quarter earnings for 2023. Net income grew by 28% on higher revenue, or funds flow, from operations, which rose 20% compared with the previous year. The company has reported positive results regarding its Peace River and Viking wells.
• Vital Energy Inc.: Explores, acquires, and develops oil and natural gas properties throughout Texas. On May 9, the company released its first-quarter earnings: net income swung to $114 million from a net loss of $87 million in the same quarter in 2022. Vital Energy posted a large 澳洲幸运5官方开奖结果体彩网:derivatives loss of $326 million in the first quarter of 2022, which is a major reason the stock is trading at such a low P/E ratio. In May, Vital Energy entered into an agreement with Forge Energy II LLC, a private oil and gas exploration company, to acquire their Delaware Basin assets through a third-party partnership. The all-cash transaction totals $540 million; the acquisition will add 198,000 net acres to the Vital Energy Permian Basin leasehold.
  
  

Fastest-Growing Oil and Gas Stocks

These are the top oil and gas stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly 澳洲幸运5官方开奖结果体彩网:year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY 澳洲幸运5官方开奖结果体彩网:earnings-per-share (EPS) growth.

Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) t🎶hat may make one figure or t๊he other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.

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• Vertex Energy Inc.: This company engages in oil refining and distribution. Note that Vertex Energy doesn't have an EPS growth figure in the table above because the company reported a loss per share in the first quarter of 2022.
• Black Stone Minerals L.P.: It owns royalty and mineral interests in oil and natural gas properties throughout 41 U.S. states. Note that Black Stone Minerals doesn't have an EPS growth figure in the table above because the company reported a loss per share in the first quarter of 2022.
• Chesapeake Energy Corp.: It explores and develops 澳洲幸运5官方开奖结果体彩网:oil and gas properties throughout the U.S. In February, Chesapeake Energy agreed to sell a portion of its Eagle Ford assets to global chemicals company INEOS for approximately $1.4 billion. In the first quarter of 2023, Chesapeake Energy's revenue nearly tripled from the year before and net income totaled $1.4 billion, or $9.60 a share. Note that Chesapeake Energy doesn't have an EPS growth figure in the table above because the company reported a per-share loss in the first quarter of 2022.
  
  

Oil and Gas Stocks With the Most Momentum

These are the oil and gas stocks that had the highest total return over the past 12 months. Companies wi🃏th total returns over 1,000% were excluded as outliܫers.

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• YPF: An Argentine-based company that produces petroleum and natural gas products from its various properties. It also engages in refining its own oil products.
• Weatherford International: It supplies energy equipment and services for the industry. In April, the company reported its first-quarter financial results. Net income was $81 million, swinging from a net loss of $74 million in the first quarter of 2022. Total revenue increased by 26% within the same period. Weatherford said that profits from its drilling activities and well construction segments have both grown by more than 20% YOY.
• Vista Energy: This company engages in oil and gas exploration among its properties in Argentina and Mexico.

Advantages of Oil and Gas Stocks

Inflation/interest rate hedge: Historically, rising 澳洲幸运5官方开奖结果体彩网:inflation has been correlated with higher oil prices, offering investors a potential portfolio hedge by investing in oil and gas stocks. Typically, the 澳洲幸ℱ运5官方开奖结果体彩网:Federal Reserve raises interest r🌱ates to tackle inflation, aiming to lower consumer demand. According to Bob Iaccino, co-founder of Path Trading Partners, the price of 澳洲幸运5官方开奖结果体彩网:West Texas Intermediate (WTI) crude contracts over the past six rate-tightening cycles has risen by an average of 16.06% six months after each rate hike.

Tax advantages: Investing in oil and gas stocks provides investors and producers with a range of unique 澳洲幸运5官方开奖结果体彩网:tax benefits. Some key advantages include the favorable way active and passive income is treated and the deduction of certain drilling and lease costs. For instance, the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) tax code considers earnings from oil and gas 澳洲幸运5官方开奖结果体彩网:royalties as passive income, while categorizing net losses as 澳洲幸运5官方开奖结果体彩网:active income. This may enable some investors to offset their production revenue losses from other forms of income, such as 澳洲幸运5官方开奖结果体彩网:capital gains.

Risks of Oil and Gas Stocks

Tightening government regulations: Oil and gas stocks face increasing challenges from environmental regulations as governments set targets for lowering carbon emissions and continue to encourage the transition from fossil fuels to 澳洲幸运5官方开奖结果体彩网:renewable energy sources. Stocks in the sector already have high 澳洲幸运5官方开奖结果体彩网:capital expenditure (CapEx); therefore, adding more costs to meet climate goals eats into 澳洲幸运5官方开奖结果体彩网:cash reserves, especialಌly if energy prices start to fall. 

Price volatility: Oil and gas stocks are prone to significant commodity price 澳洲幸运5官方开奖结果体彩网:volatility, driven by supply-and-demand fundamentals and geopolitical events. For example, a surprise decision to increase production by the Organization of the Petroleum Exporting Countri꧒es (OPEC) members can cause a sharp drop in oil prices. Conversely, war breaking out can lead to a surge in energy prices. For instance, due to Russia's position as the world's largest 澳洲幸运5官方开奖结果体彩网:gas exporter, natural gas prices gained around 75% in the first half of 2022 following Russia's invasion of Ukraine.

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As of the date this article was written, the author does not own any of the above stocks.