The Top-Performing Energy Companies Of 2019

Today I present a column I always write at the end of each quarter: The performance of different areas of the energy sector. Since the end of the quarter also represented the end of the year, I will also cover the top-performing energy companies of the year.

The S&P 500 returned 8.5% during the fourth quarter, and an impressive 28.9% for all of 2019. The rally in 2019 was broad-based. Every sector that makes up the Select Sector SPDR exchange-traded funds (ETFs) that represent the S&P 500 was up at least 20% for the year — except for one.

The Energy Select Sector SPDR ETF (XLE) tracks an index of energy companies in the S&P 500. The XLE represents the stocks of large energy companies from different sub-sectors (e.g., integrated, oil production, equipment services). It is, therefore, a good benchmark for conservative energy investors. Some of the XLE’s biggest holdings are ExxonMobil (XOM), Chevron (CVX), ConocoPhillips COP), EOG Resources (EOG), and Schlumberger (SLB)..

During the third quarter, the XLE generated a total return of 5.5% (including dividends). For all of 2019, the XLE returned 11.7%, but some segments of the energy sector outperformed even the S&P 500.

The most impressive energy sector performances in 2019 came from the midstream sector. These are the companies that transport and store oil and gas. But within this sector, the midstream corporations turned in outstanding performances, while the midstream companies that are structured as master limited partnerships (MLPs) generally lagged behind.

The Top 20 midstream companies rose by an average of 15.9% for the year, but a different picture emerges if we look at just the midstream corporations. Major midstream corporations like Enbridge (ENB), TC Energy (formerly TransCanada), and Kinder Morgan (KMI) respectively returned 36%, 56%, and 44%. Enterprise Products Partners (EPD), the largest MLP, returned 21.9%. TC Energy’s return was the best among the Top 20 midstream companies.

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