The best energy stocks to buy in 2023
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Here our experts choose their favourite energy stocks to invest in this year. We cover the basics of each company along with a description of what makes an energy stock, and show you the best place to buy the shares.
What are the top energy stocks to buy?
The top stock picks for the energy industry are in the table below. Use the links to find the latest price information or scroll down to read more about why each company made the list.
| # | Stock ticker | Company name | Trade now |
|---|---|---|---|
| 1 | CVX | Chevron Corporation | |
| 2 | BP | BP | |
| 3 | XOM | Exxon Mobil Corporation | |
| 4 | FSLR | First Solar Inc | |
| 5 | CSIQ | Canadian Solar Inc |
1. Chevron Corporation (NYSE: CVX)
Chevron is one of the largest oil companies in America. It dates its history back to the 1870s as Standard Oil, the company set up by John D. Rockefeller, a giant of American business. It’s been one of a group of seven who have dominated the oil industry for a long time.
In modern times, Chevron has continued to be one of the biggest names on the stock market. Oil companies can be controversial and tend to be affected by geopolitical events, which means they usually ebb and flow over time, but it has rewarded shareholders handsomely for taking on that risk.
It’s one of the Dividend Aristocrats, companies that have raised their dividend every year for at least a quarter of a century. It’s also being forced to branch out into new forms of energy that prioritise low emissions and renewables, and if it can start to grow its revenues in a more climate-conscious way then it will certainly be set up well for the long term.
2. BP (LON: BP)
Another of the oil ‘supermajors’, BP is a British company that has been operating for more than a century. It was majority state-owned until the 1980s and now has three stock market listings around the world, in London, Frankfurt, and New York.
Like its predecessor on this list, BP has suffered its fair share of controversies over the years. However, in the good times it tends to pay a healthy dividend and it is showing signs of bold leadership to adjust to a future where clean energy is going to be important.
It plans to increase its spending on new, low-carbon assets ten fold over the next decade. That, along with the gradual selling off of its legacy oil assets mean BP is undergoing a radical change in order to adapt to the new world order and might be available at a discount after a tough few years on the market.
3. Exxon Mobil Corporation (NYSE: XOM)
Yet another member of Big Oil, Exxon Mobil is also the second descendant of Standard Oil to feature on this list. Exxon Mobil is a huge company, one of the largest in the world by revenue and market capitalisation, and has existed in its current form since 1999, when it was created through a merger between Exxon and Mobil.
Like the companies above it, Exxon Mobil pays a dividend no matter what. That’s the big draw for investors in most traditional energy companies, and what makes it intriguing even if the stock price has flattered to deceive in recent years.
The company has also prepared for the future by creating a dedicated low-carbon wing of its business to try to transition towards clean energy. Although there have been some struggles on the way, it’s a reliable pick for anyone who wants a near-guaranteed dividend payout and to own one of the most famous companies in America.
4. First Solar (NASDAQ: FSLR)
First Solar is an American company that specialises in renewable energy sources. Formed in 1999, the company is relatively old by renewables standards and its main source of revenue comes from manufacturing solar panels.
Solar stocks have done particularly well since the US Presidential Election in late 2020, when the change in government inspired a belief that there might be more investment in renewable energy at the federal level. First Solar’s share price almost doubled over the course of the year, even accounting for the short term plunge caused by the coronavirus in March.
A company like this is a bet on the future that relies on a demand for more alternative energy sources. As the climate crisis continues to worsen, it seems a safe assumption that the demand will come to pass. First Solar is one of the more established companies in the industry and so might prove to be a better investment than many of its competitors.
5. Canadian Solar (NASDAQ: CSIQ)
Canadian Solar has been around almost as long as its predecessor on this list. Formed in 2001, it’s a Canadian company that specialises in solar panels. It has close links with China and splits most of its manufacturing and solar farms between there and its home base in Canada.
In stock market terms, 2020 and 2021 were two of the best years in the company’s history. It soared to its all time high of close to $60 per share in the early part of the year amidst the wider boom in renewable energy stocks.
Liek with First Solar, the reason it’s made this list is the potential of solar energy and the likelihood of much more investment in that space over the coming years. Established companies likely have a leg up on newer competition, and solar is a proven and safe alternative energy source.
Where to buy the best energy shares
Use one of the brokers below to get your shares right now. Visit the website by following the links in the table, or read our detailed reviews to learn more about the pros and cons of each one.
What is an energy stock?
Any company that’s involved in the manufacturing, supply, or distribution of fuel, power, or electricity. That can mean traditional oil and gas companies that fuel the transport sector just as it might mean a business that helps us keep the lights on.
Are energy shares a good investment?
That depends on the company and what your goals are as an investor. Longstanding oil companies are ideal if you want a reliable dividend stock, but they might not be best if you have ethical concerns about their business practices or are particularly worried about the environment.
The biggest positive that applies to all energy stocks is the fact that they are so necessary to how the world functions. There is always going to be demand for fuel and power in some form and so you can be fairly confident that these companies can rely on a consistent revenue stream.
If green energy in particular is more your thing, then you might want to have a look at our expert picks for the best renewable energy stocks. Otherwise, pick a broker in order to get your hands on one of the companies on this page and be sure to follow the latest news so you’re first to know about any events that might affect their price.
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