Chevron and CNX Stand Out Amid Energy Stocks
When evaluating stocks, profitability is just one aspect to consider. Companies can be profitable but still struggle with growth or face looming threats.
At StockStory, we help investors identify companies that have real staying power. Two energy stocks that balance growth and profitability are Chevron (CVX) and CNX Resources (CNX). On the other hand, Granite Ridge Resources (GRNT) may face some trouble due to its smaller revenue base and lack of free cash flow generation.
Chevron has achieved annual revenue growth of 6.3% over the past ten years, reflecting market share gains this cycle. Its unparalleled revenue scale of $215.3 billion gives it advantageous pricing and terms with suppliers. The company's stock price is $199.71, implying a valuation ratio of 12.9x forward P/E.
CNX Resources has a highly-profitable operating model that results in strong unit economics and a stellar gross margin of 68%. It has also maintained a static EBITDA margin over the last five years, showing it couldn't become more efficient. The company is trading at $36.11 per share, or 11.3x forward P/E.
On the other hand, Granite Ridge Resources owns interests in oil and natural gas wells across six major US shale basins but has a smaller revenue base of $495.7 million, which hasn't achieved economies of scale. Its EBITDA margin has declined by 36 percentage points over the last five years due to rising costs faster than its revenue.