7 Affordable Energy Stocks to Buy Under $20

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With the geopolitical winds churning, the concept of cheap energy stocks has become even more critical. Basically, the window of opportunity may be fading.

One major problem of course is the situation in the Middle East. While tensions have cooled relative to Iran and Israel launching missiles against each other, there’s always a chance of a miscalculation. Not too far away, Russia’s invasion of Ukraine shows no sign of abatement. With Russia also owning vast energy resources, a global supply chain disruption could easily skyrocket prices.

It’s a mess. And that’s why these cheap energy stocks cynically present an upside opportunity for speculators.

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Permian Resources (PR)

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Based in Midland, Texas, Permian Resources (NYSE:PR) is an independent oil and natural gas company. It focuses on the development of crude oil and related liquids-rich natural gas reserves in the U.S. Its assets are primarily focused on the Delaware Basin, which is a sub-basin of the Permian Basin.

Operationally, the company is perhaps best known for its massive top-line expansion. Its three-year revenue growth rate clocks in at 56.5%, above 93.98% of its peers. Also, its reasonably consistent in terms of profitability, with a robust operating margin of 47.07%.

For the current fiscal year, covering experts anticipate earnings per share to reach $1.61, a sizable improvement over last year’s print of $1.24. For fiscal 2025, they’re modeling for EPS of $1.80. On the top line, revenue might reach $5.01 billion. If so, we’re talking about a growth rate of 60.4% from 2023’s haul of $3.12 billion.

Lastly, the company provides a forward annual dividend yield of 3.54%. For less than $17 per share, PR is one of the cheap energy stocks to buy.

Black Stone Minerals (BSM)

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Hailing from Houston, Texas, Black Stone Minerals (NYSE:BSM) owns and manages oil and natural gas mineral interests. Per its public profile, Black Stone owns mineral interests in approximately 16.8 million gross acres, nonparticipating royalty interests in 1.8 million gross acres, and overriding royalty interests in 1.6 million gross acres located in 41 states.

While it may be one of the lesser-known cheap energy stocks, investors need to put BSM on their radar. For one thing, the company carries no debt on its books, affording it financial flexibility. In addition, its been profitable eight years out of the last decade. Its net margin over the past year has come out to 84.32%.

For fiscal 2024, experts are modeling EPS to land at $1.43. To be fair, that’s disappointing relative to last year’s print of $1.88. In addition, the top line is projected to reach only $492.24 million, down almost 17% from last year. Still, it’s poised to make a recovery in fiscal 2025, with a high-side sales target of $559 million.

What’s really drawing attention is the forward annual dividend yield of 9.15%. If you like speculating, BSM may be one of the cheap energy stocks to consider.

Talos Energy (TALO)

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Headquartered in Houston, Texas, Talos Energy (NYSE:TALO) engages in the exploration and production of oil, natural gas and natural gas liquids in the U.S. and Mexico. It’s also involved in the development of carbon capture and sequestration. It’s been a slow mover this year, losing about 8% of equity value since the beginning of January.

Nevertheless, despite the slow start, TALO could be an intriguing choice for cheap energy stocks. At the moment, Talos features a three-year revenue growth rate of 12.4%, below the sector median of 16.7%. That’s not great. As well, shares trade for 1.09X trailing-year revenue, which is about average.

Here’s the thing. Analysts are modeling for fiscal 2024 sales to reach $1.97 billion. If so, that would represent a 35.4% increase from last year’s tally of $1.46 billion. Not only that, the high-side sales target calls for $2.06 billion.

In the following year, the blue-sky sales target stands at $2.37 billion. Therefore, TALO could be surprisingly discounted relative to its anticipated top-line performance. It’s one of the cheap energy stocks to put on your watch list.

Crescent Energy (CRGY)

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Also based in Houston, Crescent Energy (NYSE:CRGY) acquires, develops, and produces crude oil, natural gas and NGL reserves. Its portfolio of assets comprises mid-cycle unconventional and conventional assets in the Eagle Ford and Uinta Basins. Priced at a bit under $11 per share, CRGY ranks among the cheap energy stocks to consider.

It’s not just about the low market price. On the financials, CRGY trades for only 0.57X tangible book value. In many ways, Crescent is priced lower than the sum of its parts. That seems rather odd given the rising relevance of the hydrocarbon sector. After all, geopolitical tensions are worsening, not improving.

For fiscal 2024, analysts are projecting EPS to reach $1.23. That’s a decent improvement over last year’s result of $1.02. Further, fiscal 2025 could see the bottom-line print rise to $1.67. On the top line, sales could land at $2.43 billion, a modest 2.2% improvement from last year. By the following year, revenue could reach $2.51 billion.

To note, the company provides a forward yield of 4.54%. Also, analysts peg shares as a moderate buy with a $16 price target, implying over 51% upside potential.

GeoPark (GPRK)

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Specializing in the oil and gas exploration and production (upstream) component of the hydrocarbon value chain, GeoPark (NYSE:GPRK) operates primarily in Chile, Colombia, Brazil, Argentina, Ecuador and other Latin American countries. While it’s not the most well-known idea among cheap energy stocks, it appears to be a hidden gem.

Financially, the company sports a three-year revenue growth rate of 26.8%, above 68.17% of its peers. On the bottom line, GeoPark carries an operating margin of 41.47%, beating out nearly 89% of the competition. Further, GPRK trades at only 0.7X trailing-year revenue.

For fiscal 2024, analysts are anticipating EPS to land at $3.15. On the top line, they’re modeling for sales of $805.65 million. Further, the blue-sky target calls for $829 million. Last year, the company posted sales of $756.6 million.

Moving forward, speculators may appreciate the value that they’re getting. Beyond the revenue multiple, shares trade for only 2.82X forward earnings. Further, the company’s forward dividend yield comes in at 5.8%. With a share price of under $10, GPRK is an attractive idea for cheap energy stocks.

VAALCO Energy (EGY)

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Another upstream specialist, VAALCO Energy (NYSE:EGY) is an independent energy company, that engages in the acquisition, exploration, development, and production of crude oil, natural gas and NGLs. Its operations are in Gabon, Egypt, Equatorial Guinea and Canada. With the geopolitical front providing a cynical catalyst, upstream players could see their demand profile rise dramatically.

As circumstances currently stand, VAALCO enjoys a three-year revenue growth rate of 47%, beating out over 90% of its rivals. Also, the company’s operating margin stands at 30.92%, above 81.9% of the competition. However, it’s the forward movement that counts.

Here, the situation is much tricker. Experts are anticipating EPS of 78 cents, which is above the prior year’s result of 62 cents. So far, so good. However, revenue may only reach $404.7 million. If so, that would be an 11.1% discount to last year’s haul of $455.07 million.

Still, with circumstances the way they are geopolitically, VAALCO’s projections may be understated. Either way, analysts peg shares a unanimous strong buy with an $8.58 price target, implying almost 37% upside potential.

Kosmos Energy (KOS)

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Headquartered in Dallas, Texas, Kosmos Energy (NYSE:KOS) engages in the exploration, development and production of oil and gas along the Atlantic Margins in the U.S. Per its corporate profile, Kosmos’ primary assets include production projects located in offshore Ghana, Equatorial Guinea, and the U.S. Gulf of Mexico, as well as gas projects located in offshore Mauritania and Senegal.

Financially, Kosmos could use some improvements. However, what may attract speculators is the value proposition. Right now, shares trade at a price/earnings-to-growth (PEG) ratio of 0.47X. That’s lower than the sector median 0.91X. In addition, shares trade at only 5.61X forward earnings, below the sector median 10.17X.

For fiscal 2024, analysts anticipate EPS to hit 98 cents, a decent improvement over last year’s print of 79 cents. Further fiscal 2025 could see EPS rise to $1.06. On the top line, revenue could land at $2.01 billion, up 18.1% from 2023’s tally of $1.7 billion. Further, fiscal 2025 sales could reach $2.17 billion, with a blue-sky target of $2.55 billion.

Finally, analysts rate shares a consensus strong buy with a $7.69 price target, implying over 32% upside potential. It’s one of the cheap energy stocks to buy if you enjoy gambling a little.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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