The Best Energy Stocks to Buy Now

Energy stocks saw strong growth in the first half of 2026 as the Iran war boosted oil prices. Returns have been volatile since then, but continue to outperform the larger market. An end to the war remains elusive, making exposure to the energy sector important, as a protracted conflict is likely to keep energy prices high.

Energy stocks appeal to investors for a few different reasons:

• They tend to perform independently of other types of stocks, so investors buy them to diversify their portfolios.
• Many energy stocks offer attractive yields and therefore appeal to investors who like high-dividend stocks.
• They provide investors with a way to play rising oil prices.
• Energy stocks can help hedge against inflation as oil and gas prices typically rise during inflationary periods.

In the year to date, the Morningstar US Energy Index rose 43.19%, while the Morningstar US Total Market Index gained 13.71%.

The 6 Best Energy Stocks to Buy Now

These were the most undervalued energy stocks that Morningstar’s analysts cover as of Aug. 18, 2026.

1. Expand Energy EXE
2. Antero Resources AR
3. EQT Production Company EQT
4. Devon Energy DVN
5. Baker Hughes BKR
6. Energy Transfer ET

To come up with our list of the best energy stocks to buy now, we screened for:

• Energy stocks that are undervalued, as measured by our metric.
• Stocks that earn narrow or wide

  Morningstar Economic Moat Ratings

  , as well as companies that do not have a moat. We think companies with narrow economic moat ratings can fight off competitors for at least 10 years; wide-moat companies should remain competitive for 20 years or more.

• Stocks that earn a Low, Medium, High, or Very High

  Morningstar Uncertainty Rating

  , which captures the range of potential outcomes for a company’s fair value.

Here’s a little more about each of the best energy stocks to buy, including commentary from the Morningstar analysts who cover each company. All data is as of Aug. 18, 2026.

Expand Energy

• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• : 2.41%
• Industry: Oil and Gas Exploration and Production

Expand Energy is the most affordable stock on our list of the best energy stocks to buy. Expand Energy is a North American natural gas producer in the Haynesville and Appalachian basins, formed by the combination of Chesapeake and Southwestern. The stock is trading 34% below our fair value estimate of $144 per share.

Expand Energy’s main strategy is to conserve its drilling resources close to where gas is needed. It also wants to be ready to capitalize on high prices when they occur. Instead of selling more gas locally, the plan is to limit gas production to the amount that can be sent through its long-distance pipelines. This should help Expand get the best prices as it awaits new liquified natural gas and infrastructure completions.

Appalachia is a prime example of this, with proximity to population centers in the Northeast with strong seasonal demand. These assets are unlikely to experience more than seasonal volume growth in the near term, with production peaking in winter and declining in summer. The region remains short on takeaway capacity, but it is likely to experience growth in basin demand. Expand plans to pass on in-basin power arrangements unless the deal is competitive against out-of-basin pricing. We view this as unlikely, as generators are unlikely to offer a premium substantial enough when gas is so plentiful, and producers look to place molecules.

Haynesville acreage will benefit from LNG facilities starting up, as it is the closest basin to multiple Louisiana projects. As LNG demand ramps up, calls on Haynesville and Texas production will accelerate. In the near term, it is the only segment expected to grow, as Expand will have new pipeline capacity as an anchor shipper to Gulf Coast hubs.

In 2026, the board abruptly ousted the CEO to accelerate its premium pricing strategy. The board’s view was that opportunities were at risk of passing the firm by, but the strategy had advanced in 2025. We will be watching for more momentum, and we expect leadership to remain undistracted by the search for a new CEO. The strategy pivot accelerated with the 2026 Twin Eagle acquisition announcement, transforming the firm into North America’s largest gas marketer by volume and complementing its title as the largest producer. The deal gives the firm access to most major markets through firm capacity contracts on interstate pipelines and storage assets.

Read more about Expand Energy here.

Antero Resources

• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: None
• Industry: Oil and Gas Exploration and Production

Antero Resources is an exploration and production firm whose operations represent a pure play in the Marcellus Shale located in northern West Virginia. This cheap stock looks 29% undervalued and has a fair value estimate of $52 per share.

Antero Resources produces natural gas in the Marcellus Shale in West Virginia. Its leaseholdings are primarily composed of land rich in natural gas liquids, which account for about a third of its production, positioning the firm well to capitalize on rising prices for ethane, propane, and butane. Overseas demand for these petrochemical feedstocks is robust, and Antero sends 50% of its NGL production to export markets. Antero also benefits from higher realized pricing as 75% of its natural gas is transported to the Gulf Coast and LNG facilities. While higher pricing on its commodities is favorable, it also pays much higher transportation fees than its peers. Antero has suffered at times due to this produce-and-export strategy, realizing thinner operating margins when gas prices are subdued. Like all Appalachia producers, it still has infrastructure constraints. Regulators and local authorities have strongly resisted new pipeline proposals recently, resulting in numerous delays and project cancellations, which limit the ability of producers to grow production. Still, with the recent acquisition of HG Energy, it seems Antero may be pivoting to expand its in-basin gas delivery, particularly as more data centers and power generation facilities move into the region.

A statistical analysis by Rystad Energy showed that Antero lacks inventory depth relative to peers, though it still has an estimated 25 years of reserves. Limited takeaway capacity also hurts in-basin commodity prices when demand for egress is high; Antero has mitigated this risk with firm transport contracts that guarantee transport out of the basin. However, we believe Antero overcommitted to these contracts to secure better realized pricing, which hurts the firm in a low-gas-price environment.

We like the steps Antero is taking in its hedging program to offset some of the risk associated with lower gas prices. In 2026, over half of its annual volumes are hedged, and we expect this to range from 25% to 50% of volumes in 2027 as the HG Energy deal is fully integrated at the operational level. Management specifically guided this level of hedging to limit risks associated with the acquisition.

Read more about Antero Resources here.

EQT Production Company

• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 1.24%
• Industry: Oil and Gas Exploration and Production

Next on our list of the best energy stocks to buy is EQT, an independent natural gas production company. The stock is trading at a 24% discount to our fair value estimate of $70 per share.

EQT is primarily a natural gas producer located in the Appalachian Basin. Its operations straddle Pennsylvania, Ohio, and West Virginia. Unlike other operators in the region, 90% of EQT’s production mix comes from dry natural gas instead of higher-value products such as oil or natural gas liquids that are more prevalent in other areas of the patch. As such, EQT is far more vulnerable to natural gas prices, which are extremely volatile.

EQT made a significant strategic shift to reintegrate its midstream service provider, Equitrans. With the integration, EQT has become more competitive and reduced net unit costs by 15%, mostly through gathering fee savings that would otherwise flow to an independent Equitrans. The acquisition also provided EQT with greater exposure to Gulf Coast export markets through the Mountain Valley Pipeline. At the end of 2024, EQT spun out the transmission assets and stake in the MVP into a joint venture with Blackstone, while still retaining the gathering assets that provided an improved cost structure.

With the buildout of liquefied natural gas facilities on the Gulf Coast, EQT has established LNG offtake agreements. It will purchase LNG from the production facilities and then find buyers through marketing operations. This is a new activity for the firm that can greatly enhance the value of its molecules, provided that it can efficiently place the volumes. Unlike integrated product marketing agreements, EQT will be taking the risk of marketing.

Data center demand and its impact on the US power grid could provide an additional tailwind for producers in Appalachia, since they’re adjacent to the Northeast corridor. For this to materialize, utilities must invest in gas power plants in the areas that EQT’s pipelines can access. EQT is also leveraging its midstream assets to strike direct supply deals with power generators and utilities.

Read more about EQT Production Company here.

Devon Energy

• Morningstar Uncertainty Rating: High
• Morningstar Economic Moat Rating: Narrow
• Forward Dividend Yield: 2.68%
• Industry: Oil and Gas Exploration and Production

Devon Energy is an oil and gas producer with acreage in several top US shale plays. Devon Energy is an affordable energy stock, trading at a 15% discount to our fair value estimate of $56 per share. The oil and gas exploration and production company earns a narrow economic moat rating.

In 2018, Devon Energy embarked on a series of shrewd capital allocation moves that included selling its EnLink Midstream interest, divesting its Canadian heavy oil and Barnett Shale interests, and merging with WPX Energy in 2021 and Corterra in 2026. This allowed Devon to recycle cash by shedding interests that were either noncore or higher on the cost curve. Recycled cash allowed Devon to meaningfully pivot toward the Delaware and enjoy newfound exposure in the Bakken and Appalachian basins.

Today, Devon is among the lowest-cost providers on the US shale cost curve, along with Diamondback Energy and EOG Resources. Devon’s reconstituted portfolio is buoyed by its presence in the Delaware, which has some of the lowest breakeven costs among US basins. About half of the firm’s production is tied to this premier asset, which helps Devon command favorable well production relative to peers. We expect management to continue allocating capital here; it signaled that over 60% of its roughly $4.9 billion in capital expenditure will be allocated to the Delaware in 2026.

Devon is more than just a single-basin play, with a presence in several low-breakeven US shale basins: the Delaware, Williston, Eagle Ford, Anadarko, and Marcellus basins. Devon’s Marcellus exposure was gained through Corterra, lifting gas to 40% of its portfolio. But investors are pushing for asset sales, and management has reiterated its focus on the Delaware, though the pace of those sales is unclear. Exposure to high-quality assets and operational improvements from initiatives like longer laterals should allow Devon to enjoy production growth. Importantly, we expect production gains will come at attractive drilling and completion costs.

We think Devon completed its reset with its revised capital-allocation framework in late 2020. That framework was the first to implement a fixed plus variable dividend. In 2026, Devon’s capital allocation framework calls for returning 70% of its free cash flow to shareholders. Devon announced a 33% increase to its fixed dividend, an $8 billion buyback plan, and $1.25 billion in debt retirement after the merger with Coterra.

Read more about Devon Energy here.

Baker Hughes

• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 1.43%
• Industry: Oil and Gas Equipment and Services

Following a 2022 reorganization, Baker Hughes operates in two segments: oilfield services and equipment, and industrial and energy technology. This cheap stock looks 12% undervalued and has a fair value estimate of $73 per share.

Baker Hughes was formed in 2017 through the combination of General Electric’s oil and gas segment and legacy Baker Hughes. While the merger was expensive, it created a global equipment and service powerhouse, supplying multiple solutions across the energy sector and adjacent markets.

We believe the rationale for bringing these assets together made strategic sense. The combination gives Baker Hughes a stronger footing with key global customers; it allows customers to deal with one vendor and enables the company to craft unique solutions that differentiate it from its peers. These solutions focus on meeting the world’s energy demands cost-effectively and securely while minimizing the impact of emissions.

Our Baker Hughes thesis primarily rests on the company’s industrial and energy technology segment. While Baker Hughes could rerate higher if it breaks up, we think it’s earned the right to keep its business whole as a compounder. Of all the trends that IET benefits from, perhaps none is greater than the booming growth in LNG capacity. We believe this need will continue, given demand from fast-growing economies, the geopolitical risk Russia poses to Europe’s energy security, and energy requirements from data centers powering artificial intelligence.

Based on new liquefaction projects coming online that are either under construction or approved by well-financed sponsors, global LNG production capacity should grow by nearly 40% from 2025 to 2030. We expect Baker Hughes to win 90% of these projects, which we’ve heard typically range from $30 million to $70 million for every million tons per year awarded. Turbine sales for these facilities include a higher-margin service tail with high attachment rates that can last more than two decades.

IET is more than just an LNG story, however. It’s a market leader in advanced compression technology used to transport natural gas through pipelines, and it’s benefiting strongly from data center growth too. Baker Hughes also wisely purchased Chart Industries. The acquisition will strengthen its competitive position in growing markets like LNG and data centers. Additionally, it will provide resilient income from parts and services sales.

Read more about Baker Hughes here.

Energy Transfer

• Morningstar Uncertainty Rating: Medium
• Morningstar Economic Moat Rating: None
• Forward Dividend Yield: 6.35%
• Industry: Oil and Gas Midstream

Energy Transfer rounds out our list of best energy stocks to buy. Energy Transfer is a diversified midstream firm operating from wellhead to consuming demand. The stock is 11% undervalued relative to our fair value estimate of $24 per share.

Energy Transfer is a diversified midstream firm moving oil, gas, natural gas liquids, and refined products. However, it only excels in a couple of areas, namely natural gas and NGLs. We expect the slowest growth from the crude and NGL segments, as liquids producers have pulled back, while natural gas demand is expected to grow 20%-30% by the end of the decade.

Natural gas transmission, both intrastate and interstate, is likely to receive most of the growth capital. Desert Southwest, a new interstate natural gas pipeline, will enter service in 2029. This build is expensive at $5.6 billion–$6.2 billion, but with 25-year terms and a guided 6 times capital cost/EBITDA, depending on the results of the open season, the investment should be a substantial driver for the segment. At the end of 2025, the project was upsized due to strong demand from utilities. A further 625 million cubic feet per day lateral was added in early 2026, showing further growth from the investment as a platform.

Beyond new pipelines, intrastate assets are likely to benefit from emerging data center demand. In keeping with the preference to assume commodity price risk, the firm’s marketing arm will supply data centers, such as Fermi’s, with natural gas. Other hyperscalers are eyeing in-basin projects, seeking to secure gas before it gets to market hubs. As the largest operator of intrastate pipelines in Texas, Energy Transfer is positioned to capture more of this demand.

NGLs are core to the firm’s service offerings, with substantial fractionation and dominant export capacity in Mont Belvieu. Energy Transfer is currently expanding its export and fractionation capabilities. It is also investing heavily in its field-level gathering and processing activities, as capturing barrels at the wellhead offers the best chance to retain them through the entire value chain.

Mergers and acquisitions remain a priority for growth. Energy Transfer has made many acquisitions over the years that resulted in substantial capital destruction. In recent years, acquisitions have been more restrained but remain consistent.

Read more about Energy Transfer here.

How to Find More of the Best Energy Stocks to Buy

Investors who’d like to extend their search for top energy stocks can do the following:

• Review Morningstar’s comprehensive list of energy stocks to investigate further.
• Stay up to date on the energy sector’s performance, key earnings reports, and more with Morningstar’s energy sector page.
• Read Morningstar’s Guide to Stock Investing to learn how our approach to investing can inform your stock-picking process.
• Use the Morningstar Investor screener to build a shortlist of energy stocks to research and watch.