5 natural gas stocks to explore in Q3: LNG, DCP, KMI, EQT & SWN

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5 natural gas stocks to explore in Q3: LNG, DCP, KMI, EQT & SWN

5 natural gas stocks to explore in Q3: LNG, DCP, KMI, EQT & SWN
Image source: © Timonschneider | Megapixl.com
Highlights:
  • EQT Corp’s (NYSE: EQT) dividend yield is 1.22%, and its annualized dividend is US$0.50.
  • DCP Midstream LP (NYSE: DCP) pays an annualized dividend of US$1.56.
  • Kinder Morgan, Inc.'s (NYSE: KMI) P/E ratio is 37.11, and the dividend yield is 6.2%. 

Natural gas is used for various domestic and commercial uses, including cooking, heating, electricity production, and automobile fuel. Natural gas prices have surged globally in recent months after Russian sanctions. Russia is one of the world’s leading oil and gas exporters.

Higher US fuel exports have also contributed to the price rise in the domestic market. US gasoline prices have climbed to a record US$5 per gallon recently. 

President Joe Biden has urged the major oil producers in the US, including Exxon Mobil Corp (XOM), Chevron Corp. (CVX), and Shell Plc (SHEL), to increase production.  

Elevated fuel prices have pinched the household budget. Businesses were also affected as utility bills increased. Energy companies have profited from the higher oil and gas prices. The energy segment of the US benchmark S&P 500 Index is the only sector to remain in green this year. 

Here we discuss five natural gas stocks that gave positive returns YTD. 

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EQT Corporation (NYSE: EQT)

Closing price on June 15, 2022: US$41.24

EQT Corp is an independent natural gas company based in Pittsburgh, Pennsylvania. It develops multi-well pads for sustainable supplies. 

Its primary customers include marketers and utility and industrial companies, mainly in the Appalachian Basin. It earns revenue from natural gas, natural gas liquids, and crude oil.

For the quarter ended March 31, 2022, its net loss was US$1,516 million or US$4.05 per share diluted compared to a net income of US$37.4 million or US$0.13 per share diluted a year ago. 

Its cash and cash equivalents were US$16.9 million as of March 31, 2022, compared to US$113.9 million as of December 31, 2021. 

The stock has a market capitalization of US$14.26 billion and a forward P/E ratio for one year of 13.93. Its dividend yield is 1.22%, and its annualized dividend is US$0.50.

The stock traded in the range of US$50.41 to US$15.71 in one year.

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5 natural gas stocks to explore in Q3: LNG, DCP, KMI, EQT & SWN

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Southwestern Energy Company (NYSE: SWN)

Closing price on June 15, 2022: US$7.76

Spring, Texas-based Southwestern Energy Co is an independent energy company. It explores, produces, and markets natural gas. 

For the March quarter of 2022, the company generated revenue of US$2.9 billion compared to US$1.07 billion a year ago. Yet, its net loss was US$2,675 million or US$2.40 per share diluted versus a net income of US$80 million or US$0.12 per share diluted in the year-ago quarter. 

The net loss in 2022 was due to higher losses on derivatives. It had US$21 million in cash and cash equivalents as of March 31, 2022. 

The stock has a market capitalization of US$8.17 billion. Its forward P/E for one year is 5.04. The SWN stock traded in the range of US$9.87 to US$3.81 in one year.

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Cheniere Energy, Inc. (AMEX: LNG)

Closing price on June 15, 2022: US$130.47

Cheniere Energy owns and operates the Sabine Pass natural gas terminal. This Houston, Texas-based company also holds a stake in Cheniere Partners. 

The company earned a revenue of US$7.48 billion for the quarter ended March 31, 2022, compared to US$3.09 billion in the same quarter the previous year. 

Its net loss was US$865 million or US$3.41 per share diluted compared to a net income of US$393 million or US$1.54 per share diluted in the March quarter of 2021. 

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Its cash and equivalents came in at US$2.49 billion as of March 31, 2022, versus US$1.40 billion as of December 31, 2021.

The stock has a market capitalization of US$32.1 billion and a forward P/E for one year of 8.42. Its dividend yield is 1.01%, and its annualized dividend is US$1.32.

The stock traded in the range of US$150.00 to US$80.06 in the last 52 weeks.

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DCP Midstream LP (NYSE: DCP)

Closing price on June 15, 2022: US$33.22

DCP Midstream is a Denver, Colorado-based oil-and-gas company. It has invested in Sand Hills natural gas liquids pipeline and Gulf Coast Express gas pipeline. 

It raked in operating revenue of 3.37 billion for the three months ended March 31, 2022, compared to US$2.3 billion in the previous year. The net income was US$81 million or US$0.32 per share diluted compared to US$54 million or US$0.19 per diluted share in the prior year.  

The stock has a market capitalization of US$6.92 billion and a P/E ratio of 19.31. Its forward P/E for one year is 9.74, the dividend yield is 4.7%, and annualized dividend is US$1.56.

DCP stock traded in the range of US$39.54 to US$23.57 in one year.

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5 natural gas stocks to explore in Q3: LNG, DCP, KMI, EQT & SWN© Eastimages | Megapixl.com

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Kinder Morgan, Inc. (NYSE: KMI)

Closing price on June 15, 2022: US$17.6

Kinder Morgan is a midstream energy firm headquartered in Huston, Texas. It transports, stores, and processes crude oil, natural gas, refined products, natural gas liquids, and carbon dioxide in North America. 

The company booked revenue of US$4.29 billion for the quarter ended March 31, 2022, compared to US$5.21 billion in the same quarter a year ago. Its net income came in at US$0.667 billion or US$0.29 per diluted share compared to US$1.41 billion or US$0.62 per diluted share in the March quarter of 2022.  

The stock has a market capitalization of US$37.87 billion and a P/E ratio of 37.11. Its forward P/E for one year is 15.44, the dividend yield is 6.2%, and annualized dividend is US$1.11.

The stock traded in the range of US$20.20 to US$15.01 in the last 52 weeks.

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Bottom line:

Since the Ukraine war erupted early this year, the US oil and gas companies have been focusing on Latin American and European markets, severely hit by Russian sanctions. These places fetch them good prices compared to the domestic market. US has been exporting a large volume of LNG to Europe to meet the energy demands as Russian supplies were interrupted. However, investors should apply due diligence before investing in the stock market.

Natural gas is used for various domestic and commercial uses, including cooking, heating, electricity production, and automobile fuel. Natural gas prices have surged globally in recent months after Russian sanctions. Russia is one of the world’s leading oil and gas exporters.

Higher US fuel exports have also contributed to the price rise in the domestic market. US gasoline prices have climbed to a record US$5 per gallon recently. 

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