How to find energy stocks
- October 21, 2021
The energy industry is in a “very challenging position,” and as a result, many investors are turning to other options, like buying shares of energy companies, according to Next Big Finance.
The firm surveyed more than 500 investors to identify what they are considering.
“Many investors are now looking at options that are not necessarily as attractive as they are at the moment,” said Kevin O’Neill, a partner at Next Big.
“There is an opportunity to find a little bit more yield with energy stocks than some people are going to find.”
The energy sector is also expected to have the highest price-to-earnings ratio in the next 12 months.
For instance, the S&P 500 index will fall about 6 percent next year.
That’s about $2.2 trillion in capital gains, which are expected to total $7.3 trillion, according the report.
Investors also are taking a look at options to diversify their portfolios, which is important for investors who want to diversified portfolios.
For example, if a stock has a dividend yield of 1.5 percent, and the price of that stock goes up by 50 percent, that means the investor is getting about 6.5 times more returns than if they held the same stock for a period of time.
Investing in energy stocks is not for everyone.
Some investors may not want to invest in energy companies for their own reasons.
For those investors, there are a number of ways to diversifying your portfolio.
Invest in bonds or mutual funds.
This will help you invest in stocks with higher dividend yields, according a report from Capital IQ.
The energy and natural resources sectors also have some great yield, according O’Neil.
Energy companies with a dividend of 2 percent are typically a good bet for a long-term investment.
And while the energy sector has seen some consolidation in recent years, there is still room for more growth, according Capital IQ, citing a recent report from Credit Suisse.
Invest only in companies that have strong earnings growth prospects.
“Energy stocks can have strong growth, but it’s not always going to be a sure bet,” O’Brien said.
Invest on margin.
Invest for a company that has a higher return and is less risky than others.
For energy stocks, that would be a good indicator that the company is doing well.
But if you’re a regular investor who wants to diversulate your portfolio, investing in a company like SolarCity is a good way to get exposure to those companies, O’Connor said.
SolarCity has been gaining attention for its solar technology.
The company is also going through some tough times.
Solar energy companies are often seen as being undervalued and the industry is still growing, but solar companies are also a risky investment because of the high cost of financing.
Solar power companies typically have lower dividend yields than their energy counterparts.
“I would recommend SolarCity over other companies,” Olin said.
“The upside to the stock is its relatively cheap and its dividend yield.
You get the dividend at a lower cost and that’s one of the benefits of investing in SolarCity.”
SolarCity stock has dropped nearly 30 percent since its IPO in 2015.
