3 Cheap Energy Stocks to Buy Now: May 2024


  • These energy stocks are strong buys.
  • Cameco (CCJ): CCJ is the world’s largest publicly traded uranium miner and recently acquired a 49% stake in Westinghouse Electric Company.
  • Cheniere Energy (LNG): LNG is a leading U.S. producer and exporter of liquefied natural gas, poised to benefit from the fastest capacity growth in the industry’s history.
  • ConocoPhillips (COP): COP is a major global oil and gas player known for its strong shareholder returns, solid financial performance and diversification efforts.
cheap energy stocks - 3 Cheap Energy Stocks to Buy Now: May 2024

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Some cheap energy stocks for investors to consider buying in May this year. Framing this article is that the G7 countries have agreed to phase out unabated coal power plants by 2035, with some flexibility for nations heavily reliant on coal. This marks a significant milestone in the global effort to reduce greenhouse gas emissions and limit global warming.

The decision comes as the U.S. Environmental Protection Agency has set new rules requiring coal-fired power plants to either capture nearly all of their climate pollution or shut down before 2040. In the U.K., coal-fired power is set to end this year with the Ratcliffe-on-Soar plant’s closure in September.

As the deadline draws near — which is less than a decade for most of them — we will see an accelerated shift toward carbon-free alternatives and more mediating alternatives such as natural gas.

The good news is that many cheap energy stocks are available for investors. Here are some of the best.

Cameco (CCJ)

Cameco Corp (CCJ) stock chart with bullish breakout pattern.
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Cameco (NYSE:CCJ) is the world’s largest publicly traded uranium miner. It provides a significant portion of the global supply of uranium for nuclear energy.

Nuclear energy, especially nuclear fusion, will be a highly important part of our energy mix moving forward. The pressing urgency to get emissions under control and shut down thermal-coal burning facilities will only speed up its adoption.

In November 2023, Cameco completed the acquisition of a 49% interest in Westinghouse Electric Company. Cameco’s acquisition of Westinghouse is a pivotal step allowing it to integrate nuclear fuel supply with reactor technology and services.

Cameco expects strong financial performance this year. The company projects its share of Westinghouse’s adjusted EBITDA to be between $445 million and $510 million. Over the next five years, it anticipates a compound annual growth rate of 6% to 10% in Westinghouse’s adjusted EBITDA​.

CCJ could be a prime nuclear energy stock pick, and it is cheap compared to its long-term potential.

Cheniere Energy (LNG)

LNG stock: the Cheniere logo displayed on a phone
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Cheniere Energy (NYSE:LNG) is a leading producer and exporter of liquefied natural gas (LNG) in the U.S., with significant operations in Louisiana and Texas. In 2023, Cheniere achieved revenues of $20.4 billion and net income of $9.9 billion, reflecting a strong performance.

For 2024, Cheniere reconfirmed its financial guidance, expecting continued strong performance. The company reported $4.3 billion in revenues and $0.5 billion in net income for the first quarter of 2024, which decreased from the previous year’s first quarter.

Still, investors should keep the long-term thesis in mind and not be dissuaded by cyclical wobbles. According to IEEFA, the global LNG production capacity is set to increase 40% over the next five years. This marks the fastest capacity growth in the industry’s history. The U.S. playing a pivotal role in numerous new liquefaction projects coming online has driven this growth.

LNG stock, like CCJ, is one of the top cheap energy stocks to consider relative to its growth potential.

ConocoPhillips (COP)

ConocoPhilips Logo

ConocoPhillips (NYSE:COP) is a major global oil and gas industry player known for its strong shareholder returns and solid financial performance.

For 2024, ConocoPhillips guided capital expenditures of $11.0 to $11.5 billion and production between 1.91 to 1.95 million barrels of oil equivalent per day (MMBOED). The company expects first-quarter production to be 1.88 to 1.92 MMBOED. 

COP also emphasizes shareholder returns, planning a return of capital of $9 billion through dividends and share repurchases​.

COP is my pick for investors who still want exposure to the (now speculative) oil industry, as it is diversifying its efforts away from it. Analysts are also bullish on COP in the short term, predicting its stock price to rise 17.61% within 12 months.

When one adds up these factors for COP, it’s one of those cheap energy stocks to consider.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-cheap-energy-stocks-to-buy-now-may-2024/.

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