Energy Stocks in Focus as Oil Prices React to Geopolitical Tensions
Higher oil prices and geopolitical tensions have put three energy stocks in focus. Natural Gas Services Group, Pason Systems, and Calfrac Well Services are all impacted by the current mix of higher oil prices, inflation pressure, and energy security concerns.
Natural Gas Services Group provides natural gas and electric compression equipment to US oil and gas producers. The company generates most of its revenue in the United States, with about 96% coming from rental compression services. Rental revenue is supported by high utilization and a growing share of longer term contracts.
Pason Systems provides hardware, software, and data services that help oil and gas drillers monitor wells in real time. The company generates most of its revenue from North American drilling, with additional contributions from completions, international drilling, and solar and energy storage. Forecast earnings growth above 40% a year and buybacks alongside a dividend present one perspective on the company.
Calfrac Well Services provides hydraulic fracturing, coiled tubing, cementing, and wireline services to oil and gas producers across Canada, the United States, and Argentina. The company's modernization program and expansion in Argentina's Vaca Muerta shale are focused on improving efficiency and pricing power at a time when geopolitical tension is influencing producer activity.
The three energy stocks are just a starting point. The full Energy Sector Stocks screener uncovered 33 more companies with equally compelling stories across oil, gas, and related services.