Hot-shot tech stocks may have been Wall Street darlings recently … but energy still makes the world go round.
And although the landscape of how we source that energy is changing, we’re not seeing electric vehicles (EVs) lined up on every street or every house decked out in solar panels.
And with crude oil back up to its pre-COVID-19 levels, it’s time to take a look to see if there are any companies that you should have in your portfolio right now.
Using the Weiss Ratings stock screener, I pulled up a list of all the stocks in the energy industry. There are only four energy stocks that have a “buy” rating, so let’s take a quick look at each of them.
First up, there’s TC Energy Corporation (NYSE: TRP), an integral aspect of North American living for over 70 years. The company operates 57,900 miles of natural gas pipeline and 3,000 miles of oil pipeline. It also owns storage facilities and power generation plants with a capacity of 4,200 megawatts.
Since 2000, the company has grown its asset base from $25 billion to over $100 billion. And those assets are quality assets. Despite the challenges of the pandemic, TC Energy’s operating assets were largely unimpacted.
This allowed the company to announce record earnings yet again for 2020. For the full year, TC Energy saw a net income of $4.5 billion compared to $4 billion the previous year. On top of that, the board raised the dividend for the twenty-first consecutive year.
Shares are up 14.7% since the beginning of the year, and the company pays a 5.4% annual dividend. Both signs that the company could be solid for years to come.
Next up, we have one of the northeast’s largest independent owners, suppliers and operators of gas stations and convenience stores with 1,550 locations: Global Partners LP (NYSE: GLP). It also operates one of the largest terminal networks to distribute gasoline and renewable fuels to wholesalers, retailers and commercial companies.
Global Partners sells 361,000 barrels of product daily ... and it’s not slowing down. The company has recently been expanding its presence in the greater Philadelphia area and began receiving renewable diesel at its terminal in Oregon. It also secured a U.S. Department of Agriculture grant to upgrade and expand five terminals to handle larger volumes of biofuel.
The company just got upgraded to a “buy” last month, but it’s still holding that sentiment. Shares are up 29% since the beginning of the year. Plus, it currently pays an 8.7% dividend to its shareholders.
Third, we have Delek Logistics Partners, LP (NYSE: DKL) which is headquartered in Tennessee. This growth-oriented master limited partnership (MLP) was formed in 2012 to own, operate, acquire and construct crude oil logistics.
These assets are integral to the success of Delek’s refining operations as they are the basis for gathering, transporting and storing the company’s crude oil. This oil can then be distributed and stored in select regions of the southeastern U.S. and West Texas for Delek and third parties.
It’s also worth noting that since the company is an MLP, its pass-through quality gives certain tax benefits. Since the beginning of the year, shares are up 26%, and the company is currently paying out 9.07% per year as a dividend.
Finally, there’s Hess Midstream LP (NYSE: HESM). This midstream company owns, operates, develops and acquires a diverse set of midstream assets to work with Hess and third-party customers. Hess Midstream owns oil, gas and produced water handling assets primarily located in the Bakken and Three Forks Shale Plays in North Dakota.
The company offers procession and export optionality to Hess and third parties. And it already has numerous commitments all the way out to 2033. Plus, it’s rapidly growing its business line of integrated water handling services.
Shares are up 18% since the beginning of the year. And just like everyone else on this list, Hess Midstream pays a dividend. It’s currently at 7.7% per year.
That’s one of the reasons that I love the energy sector. If you get in on the “buy” signal, there are profits to be had. And if you don’t, you’re still probably collecting some nice income while you’re holding and waiting for the next move.
Best,
Kelly Green
