Experts: How to Invest in the US Energy Revival

Wednesday, 31 Jul 2013 08:06 AM

By Dan Weil

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An energy boom is going on in this country, thanks largely to the oil and gas being extracted from shale formations.

The United States will likely become the world's biggest producer of natural gas in 2015 and oil in 2017, according to the International Energy Agency, The New York Times reports.

So how can investors take advantage of these developments? The paper surveyed several experts.

Editor's Note:
Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

Since stocks of the big oil and gas producers can be quite volatile, Jason O'Connell, director of equity research at Boston Private Bank & Trust, tells The Times he likes companies that make oil drilling equipment, such as Schlumberger, Cameron International and Dril-Quip.

Christopher Grisanti, co-founder of Grisanti Capital Management, talks up refiners to the paper, including Valero Energy, Marathon Petroleum, HollyFrontier and Western Refining.

And the lack of oil and gas pipelines in the middle of the country makes master limited partnerships (MLPs) that own pipelines a good investment, Anton Bayer, chief executive of Up Capital Management, tells The Times.

Be careful about investing in alternative energy sources, though, as they are highly dependent on political support, experts say.

"Solar, wind, clean coal — they're more popular from a political perspective," said Thorne Perkin, managing director of Papamarkou Wellner Asset Management, according to The Times.

On InvestorPlace.com, writer Aaron Levitt recommends five high-yielding energy stocks for income-hungry investors:

• Deepwater oil driller Ensco of the United Kingdom, with a yield of 3.4 percent;

• Canadian oil producer Baytex Energy, with a yield of 6.2 percent;

• TC PipeLines, an MLP with a yield of 6.3 percent;

• Calumet Specialty Partners, an MLP with a yield of 8.1 percent; and

• BP Prudhoe Bay Royalty Trust, with a yield of 9.4 percent.

Editor's Note: Tiny Loophole Found in 70,320 Page IRS Tax Code Could Pay $87,500

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