2 energy stocks with exciting potential and 1 we question
Even if they go mostly unnoticed, energy businesses are the backbone of our country, providing the energy we need to power our lives and businesses.But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates and commodity prices), and the industry has underperformed the market over the past six months as its 1.1% return lagged the S&P 500 by 5.2 percentage points.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here are two energy stocks we think can generate sustainable market-beating returns and one best left ignored.
One energy stock to sell:
Bristow Group (VTOL)
Market cap: $1.19 billion
Operating what's essentially an airborne taxi service for some of the world's most remote workplaces, Bristow Group (NYSE:VTOL) operates helicopters that transport workers to offshore oil and gas platforms and conduct search and rescue operations.
Why Is VTOL Risky?
- Muted 6.1% annual revenue growth over the last five years shows its demand lagged behind its energy upstream and integrated energy peers
- Subscale operations are evident in its revenue base of $1.56 billion, meaning it has fewer distribution channels than its larger rivals
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Bristow Group is trading at $40.25 per share, or 5.5x forward EV-to-EBITDA. If you’re considering VTOL for your portfolio, see our FREE research report to learn more.
Two energy stocks to watch:
Chevron (CVX)
Market cap: $455.1 billion
Operating everything from deepwater drilling rigs to corner gas stations, Chevron (NYSE:CVX) explores for, produces, and transports crude oil and natural gas, then refines that crude oil into gasoline, diesel, and other petroleum products.
Why Do We Like CVX?
- Market share has increased this cycle as its 6.3% annual revenue growth over the last ten years was exceptional
- Enormous revenue base of $215.3 billion provides significant leverage in supplier negotiations
- Solid free cash flow generation relative to most peers gives it a cushion and grants it various reinvestment opportunities
At $231.78 per share, Chevron trades at 12.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Riley Exploration Permian (REPX)
Market cap: $1.17 billion
Operating in counties where legacy oil fields have been producing since the early 1900s, Riley Exploration Permian (NYSE:REPX) drills for and produces oil and natural gas from horizontal wells in the Permian Basin of West Texas and New Mexico.
Why Will REPX Beat the Market?
- Market share has increased this cycle as its 30.8% annual revenue growth over the last eight years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 76.4%
- REPX is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Riley Exploration Permian’s stock price of $52.97 implies a valuation ratio of 6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks we like even more
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.