Natural Gas Stocks to Buy Now News ad

Active traders and investors understand the importance of taking what the market gives you. When it comes to energy stocks, the market offers a few simple realities. It gets hot in summer and cold in winter. And for much of the United States, this winter has been particularly cold.

This means it’s time to invest in natural gas. This has not been the case for most of the last five years. With the exception of 2022, when natural gas prices rose sharply following the outbreak of war between Russia and Ukraine, trading natural gas stocks has proven challenging.

However, natural gas futures on January 9, 2025 will show an increase of 12% compared to the same period last year. And as Thomas Hughes noted, the US Energy Information Administration (EIA) expects LNG prices to average US$3.00 in 2025. Supporting this forecast, on January 8, 2025, the EIA reported that natural gas inventories fell by 40 billion cubic feet in the first week of the year.

That still means inventories are 6.5% above the five-year average. But that is likely to change as some European countries will have to increase their reserves and many companies plan to turn to natural gas to reduce supply levels. Here are three natural gas stocks worth paying attention to.

Kinder Morgan today

KMI

Morgan’s children

$28.20 -0.09 (-0.32%)

As of 01/10/2025 15:58 Eastern

52 week range

$16.47

▼

$28.82

Dividend yield

4.08%

P/E ratio

24.74

Target price

$26.67

Kinder Morgan Inc. New York Stock Exchange: KMI is a mid-market company that owns and operates an extensive network spanning 79,000 miles across North America. In natural gas, Kinder Morgan is responsible for transporting approximately 40% of the natural gas produced in the United States. This means that the company’s revenue growth depends more on the volume of transportation, rather than on the underlying price of natural gas.

Analysts are forecasting high single-digit earnings growth in 2025. However, this may not fully account for the growing insatiable demand for natural gas, especially given the number of data centers that are being built to meet the demand for artificial intelligence (AI) applications.

Like many companies in the sector, Kinder Morgan is known as a reliable dividend payer. In fact, KMI stock has a high yield of 4.07% as of January 9, 2025. The company’s chief executive officer (CEO), Kim Dang, expects the dividend to rise 1.7% this year to $1.17 per share. This will be eight consecutive years of growth for the company.

ONEOK today

$101.84 -1.01 (-0.98%)

As of 01/10/2025 15:58 Eastern

52 week range

$67.05

▼

$118.07

Dividend yield

3.89%

P/E ratio

21.31

Target price

$101.54

ONEOK Inc. New York Stock Exchange: OKAY is a diversified energy infrastructure company with a pipeline network of more than 50,000 miles. The company specializes in natural gas and liquefied natural gas (NGL).

Over the past three years, ONEOK has grown earnings per share by 14% year-over-year. Over the same period, OKE shares rose by an average of 18%. Thus, it is important to note that analysts forecast the company’s earnings per share to grow by 17% next year. Is it reasonable to expect the stock to continue following suit?

Recent price action suggests there may be an opportunity for buyers. At one point in 2024, OKE stock was up 76% from its 52-week low. This has led many analysts to downgrade or lower their price targets for the stock. However, the stock’s downward move found support around $97. Currently, the consensus price target among 12 analysts is around $115. That’s an 11% share price gain combined with dividends that yield 3.86%.

NGL Energy partners today

NGL

NGL Energy Partners

$5.32 +0.21 (+4.11%)

As of 01/10/2025 15:58 Eastern

52 week range

$3.84

▼

$6.20

NGL Energy Partners LP New York Stock Exchange: LNG operates as a vertically integrated limited partnership (MLP) with a network of processing pipelines and storage facilities. In addition to natural gas, the company also operates water pipelines and crude oil.

The company’s second-quarter earnings report for fiscal 2025 was brighter on the top and bottom lines. Despite this, as of January 9, 2025, NGL shares were up approximately 28% after the earnings report.

The reason for this comes from analysts, who are forecasting positive earnings of 11 cents for the full year. After hitting negative 35 cents per share in the first two quarters, that would require significant earnings growth.

The risk is that the company may not implement this. But if it does, NGL stock could be a lucrative trade for swing traders.