Energy Stocks Shine as Supply Disruptions Fuel Higher Oil Prices

The energy sector is back in focus due to sticky inflation and a cautious Federal Reserve. The Strait of Hormuz partly closed has added to supply disruptions, causing higher oil prices. This has put three stocks from Simply Wall St's Energy Sector Stocks screener under the spotlight: ProPetro Holding (PUMP), Baytex Energy (TSX:BTE), and Paramount Resources (TSX:POU).

ProPetro Holding is an energy services company providing hydraulic fracturing, wireline, cementing, and power generation services mainly in Texas and New Mexico. The company has a market cap of US$1.33b and is pivoting towards more efficient frac fleets and its PROPWR power business. This shift could change the traditionally cyclical service business into one with recurring cash flow.

However, ProPetro remains loss-making, has concentrated exposure to the Permian Basin, and depends on disciplined capital allocation in a volatile market. Baytex Energy, on the other hand, is a Calgary-based oil and gas producer acquiring, developing, and operating crude oil and natural gas assets across the Western Canadian Sedimentary Basin. The company has a market cap of CA$4.20b and is focusing on efficiency gains in plays like Duvernay to keep capital costs in check.

Paramount Resources, another Calgary-based oil and gas producer, explores for and develops conventional and unconventional petroleum and natural gas reserves across large Duvernay and Montney land positions in Alberta. The company has a market cap of CA$4.26b and is returning capital through dividends and buybacks that could retire up to 5.28% of its shares.