1. ConocoPhillips (NYSE: COP)

ConocoPhillips is a globally diversified oil and natural gas producer operating in 15 countries, successfully capitalizing on the rise in oil and gas prices.

With full-year earnings of $8.1 billion in 2021, or $6.07 per share, the company showed a stark contrast to the $2.7 billion loss in 2020. Currently boasting a long-term growth rate of 19.8%, COP's stock price surged by 370% between March 2020 and March 2022.

Recently, the surge in energy commodity prices has further fueled months-long bull markets, with supporting trend lines becoming increasingly steep. Any price dips to around $85 would present buying opportunities for follow-through trading strategies. The 100-day SMA currently sits at $85.69, slightly above the steeper of the two support trend lines.

While excelling in extracting and selling oil and gas, the company's mission also involves expansion into renewable energy. The company stated, "In support of civilized development and consistent with our position on sustainability and climate change, we are assessing and supporting the development of renewable energy technologies, pursuing economically viable renewable energy business opportunities leveraging our expertise, intellectual property, and physical assets."

The company has cash available for funding renewable energy research and provides generous returns to shareholders. The latest financial statements indicate that the funds returned to investors through dividends and stock buybacks have been upgraded to $8 billion, providing fundamental support to the stock price, with the path of least resistance still seemingly upward amid considerable buying pressure in the market.

2. NextEra Energy (NYSE: NEE)

With a market capitalization of $148 billion, NextEra Energy possesses ample critical mass to both capture market share and weather any storms.

NextEra Energy is the world's largest producer of wind and solar power, continuing to report above-average market growth. Annual earnings growth rates are expected to reach 6-8% by 2023, with dividend policies fully aligned with traditional energy companies. Dividend payouts to investors have increased over the past 25 years, with the current dividend yield at 2.25%.

The stock's P/E ratio currently stands at 42.44, highlighting the company's absolute advantage in ethical investing, positioning it favorably to benefit from investor entry into the field.

Patience may yield returns for those intending to hold NextEra Energy in a buy-and-hold position. Amid recent volatility, after a downturn, NEE stock rebounded on February 25th, rising by 19% in just over a month. Short-term gains can help set the stage for optimal long-term investments.

3. Dominion Energy (NYSE: D)

Dominion Energy, headquartered in Richmond, Virginia, is an American power and energy company. It provides electricity to states in the eastern U.S. and natural gas as far west as Utah. With a market capitalization of $62 billion, a dividend yield of 3.46%, and a relatively low P/E ratio of 21.75, Dominion Energy stands out.

One of Dominion Energy's attractions is the clear statement from its management that they are poised to push the boundaries of energy companies, aiming to become "America's most sustainable energy company," requiring institutional investors to pay closer attention to ESG and CSR policies when executing stock purchases.

From the perspective of modern governance standards, Dominion encompasses all fundamentals, and as the global economy and investment industry transition towards green, this seems poised to support the stock price. The company's policies aim to provide reliable, affordable, clean energy, protect the environment, serve customers and communities, empower people, and create value for shareholders.

Dominion Energy's stock price is gaining momentum, leaving room for purchasing Dominion stock to capitalize on further growth. Breaking through the historic high of $90.90 set on February 24, 2020, would give long-term investors an opportunity to employ a breakout trading strategy, with technical resistance levels capped at the psychologically significant $100 per share price level.

Why are energy stock prices rising?

Since March 2020, energy company stocks have skyrocketed. This is partly due to a resurgence in demand for stocks as an asset class and the rise in prices of the commodities they produce. In the first quarter of 2022, prices for natural gas, coal, and electricity reached levels not seen in decades. Some catalysts stimulating price increases can be expected to impact long-term prices.

Covid Aftermath for Suppliers

During the Covid lockdowns, energy companies faced existential threats. With the global economy at a standstill, demand for energy stocks plummeted.

Extreme market conditions led energy companies to reduce production capacity to strengthen their balance sheets. Historically, the oil and gas industry has found it more complex to restart production than to shut it down. Years of underinvestment in new supply cannot be simply replenished, leading to bubbles in the supply pipeline. North American shale gas producers were severely impacted, with many companies going bankrupt, and a key part of the world's energy pipeline still performing poorly.

Demand Recovery

As energy suppliers strive to resume full operations, demand for energy commodities suddenly rebounded as global lockdowns ended. Coal mining domestically in India, which supplies 80% of the supply, couldn't keep up with demand.

Renewable Energy

During the transition, carbon and green energy theoretically should be able to increase supply together. Weather-related events in 2021 indeed played a role in driving up energy prices. Cold winters in the Northern Hemisphere subsequently led to droughts in Brazil and elsewhere, as well as below-average wind power production in Europe.

Supply Interruptions

Global LNG supply interruptions in the first nine months of 2021 were up by about 27% compared to the average level from 2015 to 2020.

Geopolitical Events

The Russia-Ukraine conflict is an example of a sudden event exacerbating existing demand and supply issues. Russia is the world's largest oil producer; with its supply at risk, crude oil futures prices have surged as buyers compete for supply.

Key Points for Energy Stocks

New Opportunities

Until recently, picking the best energy stocks involved screening relatively few long-established multinational oil and gas companies such as BP, ExxonMobil, Chevron, and Royal Dutch Shell. The shift towards low-carbon energy usage necessitates changing stock selection criteria, one of which is the ability to evaluate large companies' capabilities in new practices. There are also new, smaller energy companies focusing on renewable energy that need to be considered.

Growth Stocks or Defensive Stocks?

Changes in the characteristics of the energy industry mean that selecting a top energy stock doesn't necessarily mean you're buying a relatively safe company that pays substantial dividends. Some still do, but the industry now also includes exciting growth stocks.

Government's Role

The transition to more environmentally friendly energy is driven by public spending and largely financed by public spending as well. Although commitments to achieving a carbon-free economy have been established, it can be expected that some funds will gradually decrease as green energy companies become self-sustaining.

Commodity Markets

Buying energy stocks allows exposure to two asset classes, namely stocks and commodities. The price of your stock holdings will be determined by market sentiment towards both stocks and oil, natural gas, and coal. These two price-driving factors can move in the same direction or offset each other.

Ease of Purchasing Energy Stocks

The critical role energy companies play in the global economy means that good broker platforms offer access to these companies' markets. Opening and funding an online broker

 account takes only moments, and buying energy stocks requires just entering the desired number of shares and clicking "confirm order."

Practice First with a Simulated Account

Setting up a simulated account takes only minutes, usually requiring only an email address. Using a simulated account allows you to test different broker platforms and find a good fit for your trading style. The provided funds are virtual, meaning practicing buying and selling stocks is risk-free and provides an opportunity for valuable learning before upgrading to a live account.