The energy sector tends to provide substantial results during geopolitical conflicts because of changes in supply. Energy usually becomes more expensive because of declining production and distribution. However, demand remains intact and can even grow during geopolitical uncertainties. That higher demand pushes up energy prices and benefits companies in the industry. These three energy stocks can deliver solid long-term gains for investors.
Chevron (CVX)
If you are looking for a long-term investment for your portfolio, Chevron Corporation (NYSE:CVX) is an attractive option. Chevron is engaged in the exploration, production and distribution of oil and natural gas. The company engages in traditional and renewable energy sources. Chevron is an important player in the global energy industry. The company handles everything from oil and gas extraction to refining and distributing downstream products.
They recently reported financial results showing a decline in earnings in the third quarter of 2023 compared to the previous year. This is due to several factors, including one-time tax benefits in Nigeria and pension-related costs. Despite this, the corporation remains a solid performer in the energy sector.
In addition, Chevron announced a significant acquisition. The energy giant purchased the outstanding shares of Hess Corporation(NYSE:HES) in a $53 billion all-stock transaction. This move will strengthen and diversify Chevron’s portfolio, including valuable assets such as the Stabroek block in Guyana and the Hess properties in the Bakken, which is expected to contribute to future growth and cash flow. They are taking strategic steps to secure their long-term growth.
Finally, Chevron is also involved in the clean energy sector through its Chevron New Energies division. They have acquired a majority stake in ACES Delta, a joint venture working on the Advanced Clean Energy Storage project in Utah. This project converts renewable energy into hydrogen and stores it in salt caverns. This is a positive sign that Chevron is looking to the future and committed to cleaner energy sources.
NextEra Energy (NEE)
NextEra Energy, Inc. (NYSE:NEE) is a leading energy company that does most of its business in Florida. The company is engaged in the generation, distribution and sale of electricity.
In the third quarter of 2023, they reported net income of $1.219 billion on a GAAP basis, which equates to $0.60 per share, compared to $1.696 billion, or $0.86 per share, in the third quarter of 2022. On an adjusted measure, third-quarter 2023 earnings were $1,920 million, or $0.94 per share, versus $1,683 million, or $0.85 per share, in the third quarter of 2022.
In addition, the company announced a regular quarterly dividend of $0.4675 per share, which will be paid on December 15, 2023 to shareholders of record on November 24, 2023. This demonstrates its commitment to rewarding investors through stable dividends.
In important news, its subsidiary, Florida Power & Light Company (FPL), has agreed to sell Florida City Gas (FCG) to Chesapeake Utilities Corporation (NYSE:CPK) for $923 million in cash. This can be seen as a divestment strategy to focus on its key assets and improve its financial position.
Enbridge (ENB)
Enbridge (NYSE:ENB) is an energy company noted for its role in the transportation and distribution of energy resources, such as natural gas and liquids.
In the second quarter of the year, they showed solid financial performance, with substantial earnings and a stable financial base. They reported adjusted earnings of $1.4 billion, demonstrating a solid financial position. In addition, its cash flow from operations increased to $3.4 billion, reflecting a healthy operating base, an essential indicator for long-term growth.
The company is engaged in strategic initiatives to expand its operations and strengthen its market position. For example, they are building the Rio Bravo pipeline, designed to transport large quantities of natural gas to supply the Rio Grande LNG project. This demonstrates their interest in taking advantage of growth opportunities in the energy sector.
In addition, the issuance of sustainability-linked bonds reflects its commitment to emissions reduction and more environmentally friendly practices. This is consistent with the growing importance of sustainability and environmental responsibility in the energy industry.
Enbridge’s recent acquisitions, such as The East Ohio Gas Company and Questar Gas Company, are a strategic move to expand its natural gas utility platform. These acquisitions are expected to generate significant long-term value and contribute to its distributable cash flows and adjusted earnings.
As of this writing, Gabriel Osorio-Mazzilli did not hold (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
