Opinion

Top 3 Performing Oil Stocks of 2019

Posted by Michael Kuchar

27-Jan-2020


The top 3 performing oil stocks of 2019 were not the most popular names you would typically hear. Usually when the phrase “oil stocks” is mentioned, most would think of stocks like Shell, BP, etc. But the fact is that 2019 was not a good year for many oil stocks. Global oil demand outlook as provided by the International Energy Agency was weak and put bearish pressure on several oil stocks.

However, these three stocks were able to survive the onslaught of weaker oil prices and put up a good showing to end the year much higher than most of their peers. Therefore, the 3 best-performing oil stocks of 2019 were:

  1. Hess (HES)
  2. ONEOK (OKE)
  3. Kinder Morgan (KMI)

According to TradingBeasts's article Best Demo Stock Trading Account, each of these stocks is available for trading on both a real account and demo with popular brokers like IG or Plus500. Now let's have a look at how did these stocks performed in 2019. 

HESS CORPORATION (NYSE: HES)

Started in 1930s by Leon Hess as a distributor of heating oil, Hess Oil and Chemical Corporation is listed on the New York Stock Exchange. Hess delivered a 66% return for its shareholders in 2019.

The stock chart showing its price trajectory is shown below:

HESS Corporation Weekly Chart

Hess divested from its downstream operations in 2014 to focus on core exploration of crude oil and natural gas. Working with its partners, Hess was able to complete phase 1 of the Liza offshore project in Guyana, which is expected to enable the company ramp up production as from 2020, which should improve its revenue and profits drastically. Its Q2 and Q3 2019 quarterly results were stellar, and drove interest in its stock.

2. ONEOK Inc. (NYSE: OKE)

ONEOK delivered a 48% return in 2019, hugely on the back of its strategic expansion program that enabled it to ink several pipeline contracts while pushing ahead on existing contracts. 2019 saw the company improving on gross margins and operational performance.  The stock price chart shows the performance in 2019 graphically:

ONEOK Weekly Chart

ONEOK is expected to complete five existing pipeline projects in Q1 and Q2 2020. The company's 3rd quarter performance showed an increase in its adjusted earnings and net income year on year, with company officials expecting a 20% growth in earnings in 2020. This outlook is based on expectations of completion of natural gas infrastructural projects. A project to existing gas flares in the Williston Basin is also lined up for completion in 2020. Sectorial growth in the natural gas gathering and piping segments continue to drive the company's stellar numbers. If CEO Terry Spencer's optimistic view on 2020 is anything to go by, then investors and shareholders of ONEOK may be in for a bumper year.

3. Kinder Morgan (NYSE: KMI)

Kinder Morgan is a company that is involved in energy infrastructure, including pipelines. It also had a stellar 2019 that delivered 44% returns for its customers. The company also paid a $0.25 dividend per share following the release of its 3rd quarter results which showed a 13% year-over-year growth in transport volumes of natural gas. This also marked the 7th quarter in a row that the company's natural gas transportation volumes exceeded 10% growth. With the US ramping up natural gas production, these numbers could increase in the years to come. This makes Kinder Morgan's shares very attractive to medium-term and long-term investors.

Landmarks completed by Kinder Morgan include the commissioning of its Gulf Coast Express Pipeline (GCX), which is expected to reduce West Texas flaring. Furthermore, the first of ten liquefaction units to be built in the Elba Liquefaction project also went on stream.

Kinder Morgan Weekly Chart

 The company also agreed to sell the US portion of the Cochin pipeline and is also poised to sell 70% of its KML interests. These are expected to provide cash injection to help fund some of its outstanding projects.

For 2020, the company intends to complete the remaining nine units of the Elba Liquefaction project. Additional natural gas transportation from the Permian Basin is also expected for 2020, with the construction of a 430-mile Permian Highway pipeline. This pipeline is expected to become operational in October 2020.

Kinder Morgan truly has a lot of expansionary projects on its sleeves, and these are expected to provide value for investors. That is why 2019 saw the company's share price coming in 3rd on our list, as the shares of the company became the toast of investors looking to cash in on the projected revenue growth derivable from these projects.

Conclusion on the top 3 performing oil stocks of 2019

These three stocks were the best performing oil stocks in 2019. Time will tell whether they will continue from where they left off last year, in 2020.



New service from OilVoice
Trip Shepherd is for companies who need to track their staff in areas of risk.
It's free to use, so we invite you to try it.

Oil Stocksheating oilHess CorporationKinder Morgan

More items from kucharmichalbo


The Biggest Oil Discoveries of 2019

Amidst all the talk revolving around finding newer sources of energy, the world is still making huge oil and gas discoveries. Since the shale boom, conventional oil discoveries have fallen steeply, and stands at its lowest in 70 years. There are still several amazing discoveries though, in the myst ...

Michael Kuchar


Posted 10 months agoOpinion > Oil Discoveriesoil tradingcrude oil trading
All posts from kucharmichalbo