Even if they go mostly unnoticed, energy businesses are the backbone of our country, providing the energy we need to power our lives and businesses.Still, their generally high capital requirements expose them to the ups and downs of commodity prices and economic cycles, and the industry’s six-month return of 6.7% has fallen short of the S&P 500’s 11.6% rise.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here are two resilient energy stocks at the top of our wish list and one we’re steering clear of.
One Energy Stock to Sell:
Oceaneering (OII)
Market Cap: $5.10 billion
Deploying a fleet of 250 tethered underwater robots around the globe, Oceaneering International (NYSE:OII) provides remotely operated underwater vehicles and subsea equipment for offshore energy exploration.
Why Do We Think OII Will Underperform?
- Annual revenue growth of 9.8% over the last five years was below our standards for the energy upstream and integrated energy sector
- Costly operations and weak unit economics result in an inferior gross margin of 17.7% that must be offset through higher production volumes
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 4.5% for the last five years
At $51.20 per share, Oceaneering trades at 22.8x forward P/E. To fully understand why you should be careful with OII, check out our full research report (it’s free).
Two Energy Stocks to Buy:
Viper Energy (VNOM)
Market Cap: $8.68 billion
Operating a business model that requires no drilling rigs or production equipment of its own, Viper Energy (NASDAQ:VNOM) owns mineral and royalty interests in oil and gas properties, collecting revenue when operators extract resources from land.
What Makes VNOM Stand Out?
- Annual revenue growth of 40.1% 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 100%
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
Viper Energy is trading at $44.98 per share, or 17.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Tidewater (TDW)
Market Cap: $4.63 billion
Operating one of the world's largest fleets with over 200 vessels spanning 30 countries, Tidewater (NYSE:TDW) operates offshore service vessels that transport supplies, equipment, and workers to oil rigs and platforms.
Why Is TDW a Good Business?
- Market share has increased this cycle as its 30.8% annual revenue growth over the last five years was exceptional
- EBITDA profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- TDW is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Tidewater’s stock price of $93.09 implies a valuation ratio of 16.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.