⭐️Top 5 Energy Stocks to Watch 2023

The energy sector especially the crude oil industry, has been dubbed 'black gold' . This was especially true in Australia in 2022, where energy sector stocks managed to outperform the index despite a declining equity market overall.

This impressive feat saw an overall return of 37% for the energy sector compared to the rest of the market, showing the strength and resilience of the energy sector in challenging economic times. These returns demonstrate the potential for strong returns even in a bear market, making energy stocks an attractive option for investors.

The Organization of the Petroleum Exporting Countries (OPEC+) announced on Sunday that it will cut its oil production by over 1.6 million barrels a day, starting in May and running until the end of the year. This news saw both Brent crude futures and WTI, the US benchmark, spike by 6% in Monday trading. Analysts believe that the production cut could support crude oil prices, aiding economic recoveries across the world.

How do you feel about this? What would you choose if you were investing in crude oil?

The following is a list of the most popular energy stocks to watch in 2023. Have you traded any of these stocks before?

$SANTOS LIMITED(STO.AU)$

Santos Ltd (STO.AX) is a publicly-traded oil and gas exploration and production company based in Australia. The company's exploration and production activities span a range of commodities, including oil, natural gas, and liquefied natural gas (LNG). It's one of Australia’s biggest domestic gas suppliers and a leading liquified natural gas (LNG) supplier in the Asia Pacific region.

STO is committed to delivering returns to its shareholders. The company has announced plans to use 40% of its free cash flow from annual operation to pay dividends. This is in addition to the $517 million share buyback program that was announced last December 2022. STO is dedicated to ensuring that its shareholders are taken care of and will continue to explore ways to deliver value to them.

$BEACH ENERGY LTD(BPT.AU)$

Beach Energy Limited (Beach) is an Australia-based oil and gas exploration and production company. The Company’s asset portfolio includes ownership interests in strategic oil and gas infrastructure and assets across Australia and New Zealand.

Beach Energy has an ROCE of 14%, which is in line with the industry average of 14%. This return has decreased from 18% over the last five years. Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Beach Energy. In light of this, the stock has only gained 17% over the last five years.

$Ampol(ALD.AU)$

Ampol Limited purchases, refines, distributes, and markets petroleum products in Australia, New Zealand, Singapore, and the United States. The company operates through Convenience Retail, Z Energy, and Fuels and Infrastructure segments.

Ampol has achieved a remarkable return on capital employed (ROCE) of 20% which is considerably higher than the average of 13% earned by companies in the same industry. This impressive performance has been consistent over the last five years with the capital employed within the business rising 95% in that time period.

Despite this, looking ahead, revenue is forecast to decline by 4.5% p.a. on average over the next 3 years. However, revenues in the Oil and Gas industry in Australia are expected to remain flat, providing some stability amid this downturn.

$APA GROUP(APA.AU)$

APA Group engages in energy infrastructure business in Australia. The company operates through three segments: Energy Infrastructure, Asset Management, and Energy Investments. It operates natural gas pipelines, electricity interconnectors, gas fired power generation stations, and solar farms and wind farms, as well as gas storage, processing, and compression facilities.

Last year, APA Group distributed AU$0.53 to shareholders in total. Looking at the last 12 months of distributions, the company had a trailing yield of approximately 4.8%. However, APA Group paid 271% of its profit to shareholders in the form of dividends. This indicates that the company was paying out more in dividends than it earned, and this could potentially result in an unsustainable dividend - hardly an ideal situation.

$WOODSIDE ENERGY GROUP LTD(WDS.AU)$

Woodside Energy Group Ltd engages in the exploration, evaluation, development, production, marketing, and sale of hydrocarbons in Oceania, Africa, the Americas, Asia, and the Caribbean. The company produces liquefied natural gas, pipeline gas, condensate, natural gas liquids, and crude oil.

Woodside has achieved a successful 2022 financial year, recording a full-year net profit after tax (NPAT) of US$6,498 million, production of 157.7 MMboe, and operating cash flow of $8,811 million. The Directors have determined a final dividend of US 144 cents per share (cps), bringing the full-year fully franked dividend to US 253 cps. The WDS share price has risen 54% in 2022 with higher commodity demand and the company became a top five dividend payer on the ASX.

💡Share Your Insights

• Have you traded any of these stocks before? If so, did you make any profits or losses?

• In regards to these energy stocks, which ones are you bullish or bearish on, and why?

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⏰Activity Duration

7 April 2023-14 April 2023$Tiger Brokers(TIGR)$​