When it comes to investing, midcap stocks — or those with markets caps between $2 and $10 billion — have historically been the sweet spot for long-term portfolio gains. All in all, midcap stocks have outperformed their larger and smaller twins over the longer haul, when adjusted for risk.
You’ll find that the same phenomenon often holds true in midcap energy stocks.
For midcap energy stocks, their “Goldilocks” stature affords them the best attributes of large- and small-cap stocks. Typically, midcap energy stocks benefit from stable business models that throw off stronger cash flows than smaller equities. On the other hand, midcaps are just small enough to grow faster than their larger counterparts, making them ideal candidates for capital appreciation. And there’s plenty of strong dividend potential as well.
That means for investors looking to add some real energy muscle to portfolio, midcap stocks have to be on their watch list. Here are four of the best: