- Given the implications of Russia’s invasion of Ukraine, these energy stocks will likely benefit from a long-term relevant narrative.
- Devon Energy (DVN): This independent oil and gas exploration firm is poised to swing higher due to its immediate relevance.
- EOG Resources (EOG): Known for its use of technology to aid drilling operations, EOG is an important figure in the shale oil industry.
- NextEra Energy (NEE): Though NEE is taking a hit this year, energy stocks tied to renewable sources remain critical.
- Ormat Technologies (ORA): A leading player among geothermal energy stocks, Ormat adds diversity to the renewables space.
- Orsted (DNNGY): Orsted is a forward-looking renewables company worth your attention.
- Cameco (CCJ): The world’s largest publicly traded uranium company, CCJ is set for big things.
- NuScale Power (SMR): The leader in small modular reactors, NuScale could be the gamechanger for nuclear power.
The Russian invasion of Ukraine affects every country. Russia is simply no longer a dependable economic partner, especially when it comes to energy. Some investors are scrambling to find the best energy stocks to buy now.
European leaders have begun fast-tracking their renewable infrastructure goals with an eye on renewables. However, the best energy stocks to buy now are not necessarily tied to one segment. Instead, diversification is key.
As the U.S. Energy Information Administration pointed out, renewables represent just one component of the broader equation. What must be considered regarding the best energy stocks to buy now is the ability to generate reliable power throughout a given time cycle, also known as the capacity factor.
Though renewables are clean and sustainable, they feature the lowest capacity factors compared to other energy sources.
Therefore, don’t get tunnel vision when assessing viable ideas in this sector.
Devon Energy (DVN)
Devon Energy (NYSE:DVN) is an independent energy firm that primarily specializes in oil and gas exploration. The company also features significant ties in development and production, oil, gas, and natural gas liquids (NGLs) transportation and the processing of natural gas.
Both the public and policymakers have begun considering bolder moves toward clean and renewable energy sources. Nevertheless, Devon’s oil and gas exploration initiatives are appealing because they focus straight down the middle of America, from Williston Basin up north to Eagle Ford down south.
Further, the equation regarding energy stocks cannot ignore hydrocarbons. As I’ve mentioned many times, fossil fuels leverage high energy density. Therefore, DVN is likely to be relevant for many years to come.
EOG Resources (EOG)
EOG Resources (NYSE:EOG) leverages its technological acumen to aid in its drilling operations. Indeed, the Harvard Business School Digital Initiative published an article about the company’s operating model, which includes low costs and agility among its advantages.
As with Devon Energy above, EOG invariably encounters some friction stemming from its exposure to fossil fuels. Over time, however, these objections may fade.
While modern societies are ramping up their sustainable energy infrastructures, a comprehensive transition will take many years. EOG is relevant right now. Geopolitically, its operations are mostly centered in the U.S., though it also has projects in Trinidad and Tobago and Australia.
One of the keys for EOG stock moving forward is its exposure to shale oil. The underlying company is one of the biggest shale producers in the U.S. Because the geopolitical environment is likely to worsen before it gets better, EOG is an intriguing name for those who want holistic exposure to the best energy stocks.
NextEra Energy (NEE)
No one should ignore the ultimate potential of sustainable energy stocks like NextEra Energy (NYSE:NEE). Billed as the world’s largest producer of wind and solar energy, NEE is an indispensable component of the infrastructure of tomorrow.
That said, the realities of the moment have weighed heavily on NEE stock. On a year-to-date basis, shares are down nearly 26%. The capacity factor of renewables is the lowest in the sector because they are intermittent. The sun isn’t up all the time and neither does the wind blow constantly.
However, as a critical component of a diversified energy profile, renewables certainly make important contributions. This segment also is likely to enjoy continued governmental support since it aligns with political motivations. Therefore, NEE is well worth consideration among the best energy stocks to buy now.
Ormat Technologies (ORA)
Ormat Technologies (NYSE:ORA) supplies alternative and renewable geothermal energy technology.
According to the Office of Energy Efficiency & Renewable Energy, geothermal solutions are compelling because their “source is the almost unlimited amount of heat generated by the Earth’s core.
Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.”
While every solution has its set of pros and cons, an intriguing factor bolstering geothermal solutions is that they feature a capacity factor of 74.3%, well above wind’s metric of 35.4% and solar’s 24.9%. Therefore, geothermals are renewable and reliable.
For those who want to broaden their horizons regarding energy stocks, Orsted (OTCMKTS:DNNGY) has always been an intriguing idea.
A Danish multinational power company, Orsted is the biggest energy firm in its home country. Most notably, it’s the world’s largest developer of offshore wind power by number of offshore wind farms.
In the years ahead, Orsted is likely to generate plenty of attention. As I mentioned earlier, European leaders are eager to pivot away from fossil-fuel dependency.
The New York Times recently reported that G7 member states “pledged during a virtual meeting on Sunday with [Ukrainian] President Volodymyr Zelensky to ban or phase out Russian oil.”
Of course, such a drastic action item will be next to impossible to execute unless those countries have viable alternatives. Even with other countries stepping up to provide hydrocarbon channels, it will be a steep challenge to mitigate Russian resources.
While Orsted’s sustainable energy infrastructure won’t be the entire answer, it can definitely help move the process along.
Nuclear power may make some folks jittery, but the new global order implies that companies like Cameco (NYSE:CCJ) have a bright future.
Cameco enjoys a sizable advantage as it’s one of the largest global providers of uranium fuel.
Fundamentally, you’re not going to find a more reliable power source — assuming of course that things are operating smoothly — since nuclear facilities command the greatest capacity factor at 92.5%. No other source comes close.
As well, nuclear enjoys a scientific ace up its sleeve: remarkable energy density. While one kilogram of crude oil may allow a passenger car to drive around 20 kilometers, the same amount of nuclear fuel will power the car in question 1.77 million kilometers — enough to cover a trip to the moon and back twice.
NuScale Power (SMR)
Some people may shy away from NuScale Power (NYSE:SMR). The dour backdrop of the markets makes it difficult to get excited about initial public offerings (IPOs). Doubly so because the company entered the public arena via a reverse merger with a special purpose acquisition company (SPAC).
If you’ve got the patience, SMR is probably one of the best energy stocks to buy now.
The underlying company resonates with forward-thinking investors as a result of its innovative small modular reactor (SMR) technology; hence the ticker symbol.
NuScale can integrate nuclear power facilities in areas that previously could not support full-size power plants. Additionally, these advanced units feature strong safety protocols and enable greater energy resilience.
According to NuScale’s press release, its SMR solution is the “first and only to receive Standard Design Approval from the U.S. Nuclear Regulatory Commission.”
If you’re willing to overlook the controversies of nuclear power and the reputational damage of SPACs, NuScale is a name to watch closely.
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.