Energy businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of commodity prices and economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 3.5% over the past six months. This drop is a stark contrast from the S&P 500’s 16.3% gain.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here are two energy stocks boasting durable advantages and one best left ignored.
One Energy Stock to Sell:
Kosmos Energy (KOS)
Market Cap: $1.54 billion
Operating in some of the world's deepest waters with projects located up to 120 kilometers offshore, Kosmos Energy (NYSE:KOS) explores for, develops, and produces oil and natural gas from deepwater offshore fields.
Why Does KOS Fall Short?
- Sales trends were unexciting over the last five years as its 8.4% annual growth was below the typical energy upstream and integrated energy company
- Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 10.5 percentage points
- Negative free cash flow raises questions about the return timeline for its investments
At $2.59 per share, Kosmos Energy trades at 5.3x forward P/E. To fully understand why you should be careful with KOS, check out our full research report (it’s free).
Two Energy Stocks to Buy:
Occidental Petroleum (OXY)
Market Cap: $57.82 billion
Backed by Warren Buffett's Berkshire Hathaway as a major shareholder, Occidental Petroleum (NYSE:OXY) explores for, develops, and produces oil, natural gas liquids, and natural gas, primarily in the United States and Middle East.
Why Will OXY Outperform?
- Annual revenue growth of 8.4% over the last ten years was superb and indicates its market share increased during this cycle
- Unparalleled revenue scale of $24.47 billion gives it advantageous pricing and terms with suppliers
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Occidental Petroleum is trading at $57.83 per share, or 11.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Permian Resources (PR)
Market Cap: $18.37 billion
Controlling roughly 450,000 net acres in America's most productive oil patch, Permian Resources (NYSE:PR) is an oil and natural gas producer that drills wells and extracts hydrocarbons from underground reservoirs in West Texas and New Mexico.
What Makes PR Stand Out?
- Annual revenue growth of 47.2% over the last ten years was superb and indicates its market share increased during this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 76.1%
- Strong free cash flow margin of 29.7% enables it to reinvest or return capital consistently
Permian Resources’s stock price of $21.94 implies a valuation ratio of 9.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.