Oil & Energy

The Future of Energy: Battery Metals and the Companies Leading the Charge

October 7, 2023

I’ve spent countless hours researching the future of energy, and I can tell you with utmost certainty that we’re on the brink of a revolution. The key to this revolution? Battery metals.

The Linchpin of the Energy Revolution: Why Battery Metals Matter

The Shift to Renewable Energy

As the world grapples with the realities of climate change, there’s been a seismic shift towards renewable energy sources like solar, wind, and hydro. Unlike fossil fuels, which provide consistent power, renewable sources are intermittent. The sun doesn’t always shine, and the wind doesn’t always blow. This is where batteries come into play. They store excess energy when it’s available and release it when it’s needed, ensuring a consistent power supply.

The Rise of Electric Vehicles (EVs)

The transportation sector is undergoing a transformation. The days of gasoline-powered vehicles are numbered, with EVs poised to take over. These vehicles rely heavily on batteries, and by extension, battery metals. As EV adoption rates soar, the demand for these metals will skyrocket.

Grid Energy Storage

As our energy grids evolve, there’s a growing need for large-scale energy storage solutions. Batteries are becoming integral to these grids, helping stabilize them and ensuring consistent energy supply. This is especially crucial as we transition to a more decentralized energy system with multiple renewable sources feeding into the grid.

The Dependence of Other Energy Forms on Batteries

While batteries are synonymous with renewable energy, they’re also becoming crucial for other forms of energy. Even nuclear and fossil fuel plants are beginning to see the benefits of integrating battery storage to handle peak demands and stabilize their output.

The Percentage of Energy Flowing Through Batteries

It’s challenging to pinpoint an exact percentage of energy that will flow through batteries in the future. However, projections suggest that by 2040, batteries could facilitate up to 25% of the world’s energy storage needs, with that number potentially rising as technology advances and adoption rates increase.

The Metals Powering Our Future

Before we dive into the companies that are leading the charge, let’s first understand the metals that are at the heart of this revolution:

Lithium: Often referred to as “white petroleum,” lithium is the backbone of the battery industry. It’s light, highly reactive, and can store a significant amount of energy. The demand for lithium has skyrocketed with the rise of electric vehicles (EVs) and renewable energy storage solutions.
Cobalt: This is a crucial component in many lithium-ion batteries. It helps increase the lifespan of batteries and is vital for high-energy applications like EVs. However, its sourcing has been controversial due to unethical mining practices in certain regions.
Nickel: As battery technologies evolve, nickel is becoming increasingly important. High-nickel batteries offer greater energy density and are becoming the standard for EVs.
Graphite: While not a metal, graphite is essential for lithium-ion batteries. It’s used as the anode in these batteries and plays a crucial role in determining the battery’s performance and lifespan.
Vanadium: This metal is gaining traction for its use in vanadium redox flow batteries. These batteries are particularly suited for large-scale energy storage, making them perfect for grid applications.

Now, with a basic understanding of the metals that are shaping our future, let’s delve into the companies that are at the forefront of this industry.

The Top 3 Battery Metals Stocks to Buy

1. Albemarle Corporation (ALB)

Albemarle is one of the world’s largest lithium producers. With operations spanning from Australia to South America, they have a diversified portfolio of assets. Their commitment to sustainable and ethical mining practices sets them apart in an industry rife with controversy. As the demand for lithium continues to grow, Albemarle is poised to reap the benefits.

2. Glencore (GLEN)

Glencore is a giant in the mining industry, and when it comes to cobalt, they’re leading the pack. With a keen eye on the future, they’ve been ramping up their cobalt production in anticipation of the surge in demand from the EV industry. Their operations in the Democratic Republic of Congo, despite the challenges, have positioned them as a key player in the battery metals space.

3. Norilsk Nickel (NILSY)

As the name suggests, Norilsk Nickel is a titan in the nickel industry. But they’re not just about nickel; they’re also one of the largest producers of palladium and platinum. Their operations in Russia give them access to some of the richest nickel deposits in the world. As the shift towards high-nickel batteries continues, Norilsk stands to benefit immensely.

In Conclusion

The energy revolution is upon us, and battery metals are at its core. As the world moves towards a more sustainable future, the demand for these metals is set to explode. Companies like Albemarle, Glencore, and Norilsk Nickel are perfectly positioned to capitalize on this trend.

But remember, while the future looks bright, the mining industry is fraught with challenges. It’s essential to do your due diligence before making any investment decisions.

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Small Modular Reactors – The Future of Energy & The One Company Paving the Way

Editorial Staff

May 25, 2023

The Future of Energy: Small Modular Reactors

As we move into the future, the need for sustainable, efficient, and reliable energy sources is more pressing than ever. One solution that has been gaining traction is the use of Small Modular Reactors (SMRs). SMRs are a type of nuclear power plant that are smaller in size (300 MWe or less) than traditional reactors. They are manufactured at a plant and brought to a site to be assembled, offering significant cost savings and increased flexibility.

SMRs have several advantages that make them a promising energy source for the future. They are designed to be safer than traditional nuclear reactors, with features such as passive safety systems that require no active interventions in case of an accident. Their small size and modularity mean they can be used in locations not suitable for larger reactors. They also have the potential for lower initial capital investment and shorter construction times compared to traditional nuclear power plants.

Moreover, SMRs can play a crucial role in combating climate change. They produce zero carbon emissions, making them a clean energy source. They can also be used to replace aging fossil fuel plants, contributing to a reduction in global greenhouse gas emissions.

NuScale Power: A Leader in SMR Technology

NuScale Power, a company specializing in SMR technology, is well-positioned to capitalize on this growing trend. The company’s innovative design has already received approval from the U.S. Nuclear Regulatory Commission, making it the first SMR design to achieve this milestone in the U.S.

Fundamental Analysis

NuScale Power has shown strong fundamentals. The company has a robust business model, with a significant market opportunity in the SMR sector. The global SMR market is expected to reach $11.3 billion by 2026, growing at a CAGR of 14.5% from 2021. NuScale’s unique and approved design places it in a strong position to capture a significant share of this market.

The company has also secured partnerships with key industry players and has a strong order book, providing revenue visibility. However, investors should be aware that the company’s profitability is currently impacted by high research and development costs, a common characteristic of companies in the technology development stage.

Technical Analysis

Looking at the technical analysis, NuScale Power’s stock has shown a strong uptrend over the past year. The stock’s 50-day moving average is above its 200-day moving average, a bullish signal. However, the stock is currently trading near its resistance level, and a break above this level could signal further upside.

The Relative Strength Index (RSI), a momentum indicator, is currently at around 60, indicating that the stock is neither overbought nor oversold. Investors might want to watch for any significant changes in volume, as an increase in volume could indicate strong investor interest and potentially drive the stock price higher.

Conclusion

In conclusion, SMRs represent a promising future energy source, and NuScale Power, as a leader in this technology, presents an interesting investment opportunity. However, as with any investment, potential investors should carefully consider their risk tolerance and investment objectives before investing.

3 Oil Stocks w/ Dividends & Upside to Buy and Hold Now!

Editorial Staff

May 11, 2023

Today, we’ll look at stocks representing firms in the oil/natural gas sector. These businesses locate, extract, process, and provide the economy with oil, natural gas, and NGLs (natural gas liquids). The worth of their undeveloped oil and gas reserves contributes significantly to their overall value. Oil has seen some good runs on the stock exchange recently. Companies have continued to invest in supply, and even with the transition to electric vehicles, daily usage levels will likely remain stable for many years.

As offshore production increases, the industry shift tells us that oilfield services businesses can make for ideal long-term growth bets. U.S. oil corporations continue to practice caution with their financial resources. They understandably fear a price drop similar to the one that occurred between mid-2014 and 2016, which led several oil producers and others in the industry to declare bankruptcy. However, worries fade as drillers and service providers make larger in-house investments. Several of these oil companies will proceed with their projects and are likely to see success despite volatility in commodity prices. Let’s not forget, either, that these firms tend to offer robust quarterly dividend payouts.

Let’s look at three oil stocks that I like right now. I picked these from the pack while looking for strong earnings, growth, sustainability, and analyst sentiment— they’re telling us to buy:

EOG Resources Inc. (EOG)

EOG Resources, Inc. (EOG) is an American energy company engaged in oil exploration. EOG operates in Delaware and is headquartered in the Heritage Plaza building in Houston, TX. EOG is well-ranked on the Fortune 500 and on the Forbes Global 2000. EOG was founded in 1999 by Mark G. Papa. Nearing the bottom of its 52-week range and down by 11.73% YTD, EOG has a market cap of $67.2 billion. EOG shows TTM revenue of $25.6 billion at $13.21 per share, from which it profited $7.8 billion through its 30.28% net margin. EOG has a P/E ratio of 7.14x, most recently beating analysts’ EPS and revenue projections by 8.08% and 14.83%, respectively. EOG boasts year-over-year growth in EPS (+414.93%), net income (+418.72%), and profit margin (+528.35%). EOG presently has a dividend yield of 2.89%, with a quarterly payout of 83 cents ($3.30/yr) per share. With a 10-day average trading volume of 3.48 million shares, EOG has a median price target of $146, with a high of $171 and a low of $115. This represents a potential price increase of almost 50%; the analyst consensus gives EOG 27 buy ratings and 6 hold ratings.

BP PLC (BP)

BP plc (BP) is a multinational oil and gas company. BP is regarded as one of the oil “supermajors” and is one of the world’s largest companies measured by revenues and profits. BP was founded on April 14th, 1909, in London, United Kingdom, by William Knox D’Arcy and Charles Greenway, and it is headquartered in London, U.K. BP stock is currently up YTD by 5.98%; it has a market cap of $108 billion, an enterprise value of $140 billion, and a safe beta score of 0.73. BP reports a TTM revenue of $248 billion at $8.40 per share, offering an ROE (return on equity) percentage of 38.67%. BP has a P/E ratio of 20.63x, a forward P/E of 6x, a P/S (price to sales) ratio of 0.48x, and a P/B (price to book) of 1.60x. At its last earnings call, BP surpassed analysts’ EPS projection by a 17.55% margin and shows year-over-year growth in revenue (+14.27%), EPS (+193.27%), net income (+140.32%), and profit margin (+135.28%). BP has a dividend yield of 4.28%, with a quarterly payout of 40 cents ($1.60/yr) per share. With a 10-day average volume of 10.27 million shares, BP has been assigned a median price target of $45.61, with a high of $74.76 and a low of $40, representing a potential 102% price jump. BP has 19 buy ratings and 12 hold ratings.

Schlumberger NV (SLB)

Schlumberger Ltd. (SLB) is an oilfield services company. As of 2022, SLB was noted as the world’s largest offshore drilling company and the world’s largest offshore drilling contractor by revenue. SLB was founded in 1926 in Paris, France, by the Schlumberger brothers Conrad and Marcel, and is currently headquartered in Houston, TX. SLB, considered undervalued by some on Wall Street, is currently down by 12.81% YTD. SLB has a market cap of around $70 billion and an enterprise value of $81.3 billion. SLB shows $29.8 billion in TTM revenue at $2.68 per share, making a $3.4 billion profit with a net margin of 12.21%. SLB has a P/E ratio of 18.5x, a forward P/E of 16.5x, and a PEG ratio of 1.12x. SLB has had success with its earnings reports, most recently surpassing analysts’ projections for EPS and revenue by 3.67% and 3.76%, respectively— the quarter prior, by margins of 4.90% and 1.17%. SLB has an operating free cash flow of $3.92 billion and a 10-day average trading volume of 9.27 million shares. SLB has a dividend yield of 2.15%, with a quarterly payout of 25 cents ($1.00/yr) per share. SLB has a median price target of $65, with a high of $75 and a low of $49, representing a potential price increase of 61%. Analysts are bullish on this one; SLB has 30 buy ratings and 2 hold ratings.

– Adam @ Wall St. Watchdogs

Power Up Your Portfolio: Top Energy ETFs to Watch Now

Editorial Staff

April 26, 2023

Energy stocks and exchange-traded funds (ETFs) were a popular bet in 2022. Russia’s war with Ukraine, higher travel demand, and other drivers sent U.S. crude oil prices from around $75 at the start of 2022 to multiple peaks above $120 across the year. The energy sector was far and away the best performer of 2022. The Energy Select Sector SPDR Fund (XLE) delivered a massive total return of 64.2% versus a negative total return for the S&P 500 and nine of its eleven sectors. But after a year like that, many wonder where energy is headed in 2023.

The previous year’s tailwinds will be almost impossible to replicate. Still, certain sparks – including China’s reopening, continued conflict in Ukraine, and the possibility of more surprise output cut announcements from OPEC+ – could sustain a floor under oil prices. While the odds are against energy repeating as the S&P leader this year, there is reason to believe energy still has more gas in the tank.

Considering the industry’s nuances, choosing one or two energy stocks to invest in can seem intimidating. An ETF is an alternative that lets you profit from energy sector tailwinds without having to pick individual stocks. In this article, we’ll take a look at three energy ETFs to consider for long-term investors who want exposure to solid companies without the risk of choosing just one or two names.

Energy Select Sector SPDR Fund (XLE)

The Energy Select Sector SPDR Fund is the most significant energy ETF on the market by far. At $38 billion, XLE has roughly 5x as much in assets under management as No. 2, the Vanguard Energy ETF (VDE) ~$8 billion in assets under management.

XLE, which will celebrate its 25th birthday next December, is pretty cut-and-dry. It’s a collection of the energy-sector stocks found within the S&P 500. In other words, you’re getting a concentrated heap of big, blue-chip, U.S.-based oil-and-gas exposure. The fund is weighted by market cap, which means the bigger the stock, the larger the stake. Currently, its positions in Exxon Mobil (XOM) and Chevron (CVX) combined account for well over 40% of XLE’s assets. So if concentration is a concern, a different strategy may be more appropriate. The fund has a desirable 0.10% expense ratio and a 3.8% dividend yield.

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Invesco S&P 500 Equal Weight Energy ETF (RYE)

If XLE’s massive allocations to Exxon and Chevron make you nervous, there’s a way to get diversified energy exposure that’s much more evened out. The Invesco S&P 500 Equal Weight Energy ETF is one of the few energy ETF options not weighted by market cap.

Like XLE, RYE invests in the S&P 500 Energy Index, which means a current portfolio of the same 23 stocks. However, instead of weighting them by market cap, RYE starts every stock off at the same weight each quarter. The stocks might move up or down over the next three months, but regardless of how big or small they’ve gotten, RYE will rebalance them at the same weight come the next quarter.

Currently, Chevron is still a top-10 holding but at under 5% of assets. Marathon Petroleum (MPC) and Occidental Petroleum (OXY) – which combined are worth $108 billion, versus Chevron’s $324 billion – are the two top holdings, with current weightings of 4.5% apiece. This Invesco fund will do the trick if you want to rest easy knowing you’re not carrying any excess single-stock risk. RYE has an expense ratio of 0.4% and a dividend yield of 3.7%.

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iShares Global Energy ETF (IXC)

Energy inflation isn’t a purely American phenomenon. The rest of the world has also suffered from higher oil and gas prices … and many international oil giants have profited along with their U.S. counterparts.

The largest, most liquid fund covering a worldwide spectrum of energy equities is the iShares Global Energy ETF (IXC) – a nearly $2-billion-plus portfolio of 52 companies that dominate global energy production, refining, storage, and other industries. The fund includes both domestic and international stocks. The official breakdown is U.S. 60%/rest of the world 40%, with the U.K. (12%), Canada (11%), and France (5%) representing the top non-American country weights.

Giants Exxon and Chevron still lead the way here, at 17% and 11%, respectively. But this fund also provides significant exposure to international energy giants, including Britain’s Shell (SHEL) at 8%, BP (BP) at 4%, and France’s TotalEnergies (TTE) at 5%. If you’re looking to defray a little geographic risk, IXC is one of the best energy ETFs to do so while still printing a nice profit from higher global commodity prices. The fund has an expense ratio of 0.4% and an attractive 4.7% yield.

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The Linchpin of the Energy Revolution: Why Battery Metals Matter

The Shift to Renewable Energy

The Rise of Electric Vehicles (EVs)

Grid Energy Storage

The Dependence of Other Energy Forms on Batteries

The Percentage of Energy Flowing Through Batteries

The Metals Powering Our Future

The Top 3 Battery Metals Stocks to Buy

1. Albemarle Corporation (ALB)

2. Glencore (GLEN)

3. Norilsk Nickel (NILSY)

In Conclusion

The Future of Energy: Small Modular Reactors

NuScale Power: A Leader in SMR Technology

Fundamental Analysis

Technical Analysis

Conclusion

EOG Resources Inc. (EOG)

BP PLC (BP)

Schlumberger NV (SLB)

Energy Select Sector SPDR Fund (XLE)

Invesco S&P 500 Equal Weight Energy ETF (RYE)

iShares Global Energy ETF (IXC)

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