Investing in energy stocks can be both thrilling and nerve-wracking. When the sector is on fire, it can rival the fast-paced nature of tech stocks. Energy stocks tend to surge during periods of high oil prices or geopolitical tension, leading to significant volatility that attracts traders looking to capitalize on the action.
While past performance doesn’t guarantee future success, many top energy stocks have established themselves as industry leaders over the years. Some companies even catch the eye of prominent investors like Warren Buffett, who recently acquired shares in Occidental Petroleum.
Below are the top-performing energy stocks, exclusively sourced from the Energy Select Sector SPDR Fund ETF (XLE).
Best energy stocks as of September 2024
| Company and ticker symbol | Performance in 2024 |
|---|---|
| Targa Resources (TRGP) | 69.1% |
| ONEOK (OKE) | 31.6% |
| The Williams Companies (WMB) | 31.4% |
| Diamondback Energy (FANG) | 25.8% |
| Kinder Morgan (KMI) | 22.3% |
| Marathon Petroleum (MPC) | 19.4% |
| Marathon Oil (MRO) | 18.6% |
| Exxon Mobil (XOM) | 18.0% |
| Valero Energy (VLO) | 12.9% |
| EOG Resources (EOG) | 6.5% |
Data as of Aug. 30, 2024
Is it wise to invest in high-performing energy stocks?
Investing in individual energy stocks can be challenging, as it requires a deep understanding of the industry dynamics and each company’s specific exposure and assets. While investing in individual stocks can be lucrative for those willing to put in the effort, it’s crucial to acknowledge the high volatility and bankruptcy risks associated with energy stocks.
Alternatively, if you prefer a more diversified approach with less risk, consider investing in energy-focused index funds, ETFs, or mutual funds. These investment vehicles offer exposure to a broad range of energy stocks, allowing you to benefit from the sector’s potential upside while minimizing company-specific risks.
Diversification can shield you from individual company risks but won’t protect you from broader industry risks, such as fluctuating oil prices. Whether you opt for individual stocks or funds, understanding the factors driving your investment returns is essential.
Key takeaway
While following high-performing stocks can provide valuable insights into market trends, it’s crucial to conduct thorough research and analyze the fundamentals of each investment. Avoid investing based solely on past performance, as it may lead you to overlook future opportunities.
Ultimately, investing is a strategic game, and it’s essential to wait for the right opportunities rather than rushing into every trend. As Warren Buffett famously said, “The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch.”
Editorial Disclaimer: Before making any investment decisions, all investors are encouraged to conduct their own independent research on investment strategies. Past performance is not indicative of future price appreciation.