- The best energy stocks to buy are those that provide the most growth potential.
- Exxon Mobil (XOM): One of the world’s biggest oil and gas companies, Exxon Mobil is controversial but it is easily one of the best energy stocks to buy.
- ConocoPhillips (COP): Specializing in hydrocarbon exploration and production, ConocoPhillips will likely only rise in relevance.
- Marathon Oil (MRO): An independent oil and gas exploration firm, Marathon Oil’s majority focus on domestic projects affords it geopolitical resilience.
- Sunoco (SUN): One of the largest independent fuel distributors in the U.S., Sunoco’s infrastructural importance makes a case for best energy stocks to buy.
- Ormat Technology (ORA): Supplying alternative and renewable geothermal energy technology, Ormat is one of the best energy stocks to buy for potential long-term growth.
- NuScale Power (SMR): Leveraging its distinct small modular nuclear reactor technology, NuScale could be pivotal in the shifting energy industry.
- Brenmiller Energy (BNRG): Although incredibly risky, Brenmiller’s thermal energy storage system could help bolster existing power grid infrastructures.
While finding creative avenues to grow your money in the equities sector is incredibly rewarding, during times like this, you should mainly focus on what the market is giving you. At the present juncture, one of the best-performing industries is energy. No matter how high prices go, people need it to survive. Therefore, investors should focus on the best energy stocks to buy in June.
Granted, this segment is not known for its feel-good narrative. Indeed, a major catalyst for the best energy stocks to buy — Russia’s unprovoked invasion of Ukraine — not only shelved a major portion of global oil inventory but sparked a destabilizing geopolitical framework. Nevertheless, the harsh reality is that hydrocarbons keep the world moving; therefore, this sector has largely been insulated from the broader market calamity.
What’s more, it’s reasonable to expect higher energy prices for the foreseeable future. Unfortunately, a perfect storm of military conflict, capacity constraints and blistering inflation has bolstered fossil fuels to ridiculous levels. And people will pay these prices because honestly, what choice do they have?
On that sour note, here are the best energy stocks to buy in June.
Exxon Mobil (XOM)
One of the biggest oil and gas companies in the world, Exxon Mobil (NYSE:XOM) isn’t exactly winning many friends now. The company has for years faced accusations that it lied about climate science to cover its own contributions to the problem.
But here’s the situation with XOM in the new normal: you can either have a working infrastructure or you can have climate justice but you can’t have both. With rising inflation crimping household budgets and Russia’s belligerence not helping matters, it has never been more important to discuss energy diversity rather than merely replacing one form with another.
Again, Exxon Mobil is hardly what you call a feel-good story. We all understand this. At the same time, XOM is one of the best energy stocks to buy in June precisely because it’s relevant now, not relevant a decade into the future.
In recent years, sustainable energy solutions — particularly wind and solar — have become a much more prominent talking point among the best energy stocks to buy. However, when it comes to capacity factor, wind and solar rank at the bottom of the pile. The reason is that these sources are intermittent and are not nearly as reliable as competing sources.
In other words, hydrocarbon exploration and production are still relevant, putting ConocoPhillips (NYSE:COP) in good standing. While it’s disappointing that geopolitical rumblings have forced nations to scramble for energy sourcing alternatives, it’s sadly the cards we were all dealt. And like it or not, the paradigm shift has given COP new life.
On a year-to-date basis, shares have skyrocketed over 63%. While some folks would prefer not to buy into strong momentum, COP could have more room to run. As with the other best energy stocks to buy that are tied to the hydrocarbon industry, ConocoPhillips is relevant right now.
Marathon Oil (MRO)
The key lesson that global policymakers learned in the first half of this year is that securing energy supplies is only half of the equation. Where you get the resources from is just as vital. But this very factor is what makes Marathon Oil (NYSE:MRO) an intriguing name among the best energy stocks to buy in June.
An independent hydrocarbon exploration firm, Marathon is mostly focused on domestic projects. At the end of 2020, the company “had 972 million barrels of oil equivalent of estimated proven reserves, of which 86% was in the United States and 14% was in Equatorial Guinea.” In that year, Marathon sold 383,000 barrels of oil equivalent per day.
Aligned with the performances of the best energy stocks to buy, MRO has gained over 88% YTD. During the trailing year, it’s up nearly 138%. With few alternatives for customers, demand should be robust, making MRO a viable (albeit cynical) idea.
As a fuel distributor — one of the biggest in the U.S. — Sunoco (NYSE:SUN) plays a significant role in the broader transportation infrastructure. Of course, that will be of little comfort to those who have to endure the pain at the pump. With the national average price of gasoline per gallon hitting $4.61 during Memorial Day weekend, that’s a lot of wallets crying for mercy.
Nevertheless, drivers should not expect relief anytime soon. According to the U.S. Bureau of Transportation Statistics, vehicle miles traveled are now back up to pre-pandemic norms. But because supply chain crises have not been fully resolved, this normalization is essentially occurring at the wrong time. Stated differently, drivers will be forced to pay up due to lack of options.
I suppose that people can make a mass pivot to electric vehicles, but that raises another dilemma: the average transaction price for new EVs have recently jumped to slightly over $60,000. That’s just not feasible, making SUN one of the best energy stocks to buy.
Ormat Technology (ORA)
While hydrocarbons are in focus due to the current geopolitical backdrop, forward-thinking investors may want to consider advanced solutions such as geothermal energy, the main specialty of Ormat Technology (NYSE:ORA). Leveraging the heat generated by the Earth’s core, geothermal is promising because of its clean and renewable profile.
One of the main advantages of geothermal fields is that they “produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases.” As well, geothermal energy is available 24 hours a day, giving this subsegment the highest capacity factor below nuclear energy.
Finally, geothermal is homegrown, translating to reduced dependency on foreign oil. Of course, no energy source is perfect, with geothermal being location dependent and suffering from high initial costs. Still, Ormat could be one of the best energy stocks to buy for patient investors.
NuScale Power (SMR)
Following multiple high-profile nuclear accidents, any company that enters into this arena will face reputational challenges. Nevertheless, NuScale Power (NYSE:SMR) is one of the most intriguing names among the best energy stocks to buy. Yes, it is speculative, meaning that you should only invest money you can afford to lose. At the same time, SMR stock has serious upside potential.
In short, NuScale specializes in small modular reactors or nuclear facilities that feature a smaller physical footprint, allowing integration into areas previously inaccessible for traditional nuclear powerplants. Moreover, according to the company’s press release, “NuScale’s SMR technology is safe, reliable and scalable and the first and only to receive Standard Design Approval from the U.S. Nuclear Regulatory Commission.”
Most importantly, nuclear power features the highest capacity factor out of all other energy sources at 92.5%. Basically, nuclear facilities are pumping out maximum power around 93% of the time throughout the year due to minimal maintenance and refueling needs. Therefore, SMR could be very interesting down the line.
Brenmiller Energy (BNRG)
Easily the riskiest idea among the best energy stocks to buy mentioned here, Brenmiller Energy (NASDAQ:BNRG) is at this moment only appropriate for speculators. Since making its U.S. public market debut — shares previously traded in the Tel Aviv Stock Exchange — BNRG has plunged over 47%. More volatility isn’t out of the question.
However, it’s possible that over time, Brenmiller could turn things around. Specializing in a patented high-temperature thermal energy storage system called bGen, it accrues charging energy from multiple sources during off-peak hours. Later, when energy needs are at their greatest, the bGen system can release requested power on demand, thus potentially improving the efficiency of energy distribution.
As well, Brenmiller is growing its portfolio of impressive partnerships, ranging from government entities to publicly traded corporations. Again, it’s a risky idea, generating very limited revenue last year. But if you’re looking to swing for the fences, BNRG could be for you.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.