Pro: buy Cheniere Energy stock as natural gas demand is here to stay
Cheniere Energy Inc (NYSEAMERICAN: LNG) is already up 50% for the year but Victoria Greene (Chief Investment Officer of G Squared Private Wealth) is convinced the stock is not out of juice yet.
Cheniere is all the more important amidst the Ukraine warCopy link to section
Greene expects the Houston-headquartered firm to benefit as Russia continues to cut the supply of natural gas to Europe. This morning on CNBC’s “Worldwide Exchange”, she said:
Europe will need natural gas and they’re one of the best-run companies for LNG exports. I don’t think we’ll see the natural gas demand go down any further. If anything, we’ll see it continue to grow as Russia situation plays out.
Earlier this year, the U.S. committed to increasing supply of natural gas to the European Union in a bid to minimise the latter’s reliance on Russia. And Cheniere Energy sits at the heart of that LNG deal.
Wall Street has a ‘buy’ rating on Cheniere Energy stockCopy link to section
Green’s constructive view is in line with Wall Street that also rates Cheniere Energy stock at “buy”. Last week, Cheniere Energy reported market-beating results for its fiscal second quarter on higher prices and sales volume.
The $39 billion firm is devoted to increasing its production of natural gas, particularly through the “Corpus Christi Stage 3 Project” that will go live in late 2025.
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On top of that, the liquefied natural gas company is using its cash flow to lower the debt on its balance sheet, thereby creating more room to the upside. Cheniere currently has a dividend yield of just under 1.0%.
To play the renewables side of the “energy trade”, Greene likes NextEra Energy Inc (NYSE: NEE) – the world’s largest generators of clean, renewable wind energy that’s roughly flat for the year at the time of writing.