The 10 Best Energy Stocks to Buy Now
Morningstar screened companies that are:
• Undervalued (based on price/fair value metrics)
• Have economic moats (narrow or wide, showing durable competitive advantage)
• Hold uncertainty ratings (ranging from Low to Very High, depending on predictability)
The top 10 undervalued energy stocks as of October 23, 2025 are:
1. Devon Energy (DVN)
2. Occidental Petroleum (OXY)
3. SLB (formerly Schlumberger)
4. ONEOK (OKE)
5. EOG Resources (EOG)
6. Energy Transfer (ET)
7. ConocoPhillips (COP)
8. TotalEnergies (TTE)
9. Halliburton Energy Services (HAL)
10. MPLX (MPLX)
️ Detailed Company Insights
1. Devon Energy (DVN)
• Price/Fair Value: 0.67 (33% undervalued)
• Dividend Yield: 2.87%
• Moat: Narrow | Uncertainty: High
Devon is a low-cost U.S. shale oil and gas producer, particularly dominant in the Delaware Basin. Strategic divestments and a merger with WPX Energy strengthened its position. About 60% of its $4 billion capital expenditure for 2025 targets the Delaware Basin. Devon’s disciplined approach — including a fixed-plus-variable dividend framework — ensures steady shareholder returns (60% of free cash flow).
Analyst View: Devon’s cost efficiency, diversified assets, and shareholder-focused capital strategy make it the cheapest yet strongest E&P stock on the list.
2. Occidental Petroleum (OXY)
• Price/Fair Value: 0.68 (32% undervalued)
• Dividend Yield: 2.24%
• Moat: None | Uncertainty: Very High
Oxy operates across the U.S., Latin America, and the Middle East. Despite debt concerns from the Anadarko acquisition, it has since repaired its balance sheet. Its unique carbon capture projects through Oxy Low Carbon Ventures give it a sustainability edge. The 2024 CrownRock acquisition boosted its presence in the Midland Basin.
Analyst View: Oxy’s diversification and carbon initiatives make it an innovative play in an evolving oil landscape.
3. SLB (Schlumberger Ltd.)
• Price/Fair Value: 0.72 (28% undervalued)
• Dividend Yield: 3.17%
• Moat: Narrow | Uncertainty: High
SLB is the world’s leading oilfield-services provider, driven by core, digital, and new energy divisions. Despite short-term global slowdowns, it maintains strong positions in Middle East and Latin American offshore projects. Its digital solutions enhance margins and stabilize revenue against cyclical downturns.
Analyst View: SLB’s innovation and international reach make it a resilient long-term player in energy services.
4. ONEOK (OKE)
• Price/Fair Value: 0.78 (22% undervalued)
• Dividend Yield: 5.91%
• Moat: Narrow | Uncertainty: Medium
ONEOK specializes in natural gas gathering, processing, and transportation. Recent acquisitions (Magellan, EnLink, Medallion) expanded its midstream network. Its growth lies in linking U.S. Permian gas to Mexican LNG export pipelines — opening international revenue channels.
Analyst View: A strong dividend payer with growing exposure to global natural gas markets.
5. EOG Resources (EOG)
• Price/Fair Value: 0.79 (21% undervalued)
• Dividend Yield: 3.77%
• Moat: Narrow | Uncertainty: Medium
EOG remains one of the lowest-cost shale producers in the U.S., with high-quality assets in the Permian and Eagle Ford Basins. It returns over 70% of free cash flow to investors and prefers special dividends to overvalued buybacks.
Analyst View: EOG’s operational excellence and field-level decision-making culture make it an efficient, shareholder-friendly E&P leader.
6. Energy Transfer (ET)
• Price/Fair Value: 0.80 (20% undervalued)
• Dividend Yield: 7.83%
• Moat: None | Uncertainty: Medium
One of the largest U.S. pipeline operators, Energy Transfer’s strength lies in its vast midstream infrastructure. Future growth will come from natural gas transport projects like Desert Southwest Pipeline and data center gas supply contracts. It also continues to expand export and fractionation capacity in Mont Belvieu, Texas.
Analyst View: High-yielding and strategically expanding in gas logistics, Energy Transfer remains a steady income play.
7. ConocoPhillips (COP)
• Price/Fair Value: 0.83 (17% undervalued)
• Dividend Yield: 3.46%
• Moat: Narrow | Uncertainty: High
ConocoPhillips combines U.S. shale operations with international projects. Its natural gas exposure via LNG facilities in Qatar, Australia, and the U.S. gives it global diversification. The company focuses on disciplined oil growth while locking in long-term LNG contracts to hedge against price volatility.
Analyst View: A balanced oil and gas portfolio positions COP for long-term resilience.
8. TotalEnergies (TTE)
• Price/Fair Value: 0.85 (15% undervalued)
• Dividend Yield: 6.35%
• Moat: None | Uncertainty: High
The French integrated giant balances traditional oil expansion with renewable energy ambitions. Total plans to invest 30% of total spending in low-carbon energy by 2030, while still growing oil and LNG production by 3% annually. It is also building large solar and combined-cycle gas plants to double electricity generation.
Analyst View: A strong hybrid model combining energy transition leadership and cash-rich oil operations.
9. Halliburton Energy Services (HAL)
• Price/Fair Value: 0.88 (12% undervalued)
• Dividend Yield: 2.50%
• Moat: Narrow | Uncertainty: High
Halliburton dominates North American oilfield services. It focuses on electric fracturing technology to cut emissions and costs. Despite short-term challenges from OPEC+ capacity and reduced U.S. shale activity, its offshore international business is gaining importance.
Analyst View: A technology-driven service provider ready to benefit from offshore growth and energy efficiency trends.
10. MPLX (MPLX)
• Price/Fair Value: 0.93 (7% undervalued)
• Dividend Yield: 7.52%
• Moat: Narrow | Uncertainty: Medium
MPLX operates midstream assets and refineries, with 65% of its earnings from crude and refined product transport. Its partnership with ONEOK for a marine export terminal supports long-term revenue. The firm’s cautious project funding approach ensures solid returns.
Analyst View: Reliable income stock backed by stable cash flow and high-yield dividends.
⚙️ How to Find More Energy Stocks
Investors can:
• Explore Morningstar’s energy sector page for updates and earnings insights.
• Review its comprehensive energy stock database.
• Use the Morningstar Investor Screener to identify undervalued or high-moat opportunities.
• Read the Morningstar Guide to Stock Investing for a structured stock-picking approach.
Key Takeaway
The report highlights a balanced mix of exploration & production (E&P), midstream, and oilfield-service companies.
The major themes across these energy picks include:
• Undervaluation (10–33% discounts to fair value)
• Dividend strength (ranging from 2.2% to over 7.8%)
• Capital discipline and improved cost efficiency
• Transition readiness, especially for firms like TotalEnergies and Oxy
In short, the energy sector remains a solid choice for investors seeking inflation protection, income, and value opportunities—even amid global energy transition pressures.
Morningstar screened companies that are:
• Undervalued (based on price/fair value metrics)
• Have economic moats (narrow or wide, showing durable competitive advantage)
• Hold uncertainty ratings (ranging from Low to Very High, depending on predictability)
The top 10 undervalued energy stocks as of October 23, 2025 are:
1. Devon Energy (DVN)
2. Occidental Petroleum (OXY)
3. SLB (formerly Schlumberger)
4. ONEOK (OKE)
5. EOG Resources (EOG)
6. Energy Transfer (ET)
7. ConocoPhillips (COP)
8. TotalEnergies (TTE)
9. Halliburton Energy Services (HAL)
10. MPLX (MPLX)
️ Detailed Company Insights
1. Devon Energy (DVN)
• Price/Fair Value: 0.67 (33% undervalued)
• Dividend Yield: 2.87%
• Moat: Narrow | Uncertainty: High
Devon is a low-cost U.S. shale oil and gas producer, particularly dominant in the Delaware Basin. Strategic divestments and a merger with WPX Energy strengthened its position. About 60% of its $4 billion capital expenditure for 2025 targets the Delaware Basin. Devon’s disciplined approach — including a fixed-plus-variable dividend framework — ensures steady shareholder returns (60% of free cash flow).
Analyst View: Devon’s cost efficiency, diversified assets, and shareholder-focused capital strategy make it the cheapest yet strongest E&P stock on the list.
2. Occidental Petroleum (OXY)
• Price/Fair Value: 0.68 (32% undervalued)
• Dividend Yield: 2.24%
• Moat: None | Uncertainty: Very High
Oxy operates across the U.S., Latin America, and the Middle East. Despite debt concerns from the Anadarko acquisition, it has since repaired its balance sheet. Its unique carbon capture projects through Oxy Low Carbon Ventures give it a sustainability edge. The 2024 CrownRock acquisition boosted its presence in the Midland Basin.
Analyst View: Oxy’s diversification and carbon initiatives make it an innovative play in an evolving oil landscape.
3. SLB (Schlumberger Ltd.)
• Price/Fair Value: 0.72 (28% undervalued)
• Dividend Yield: 3.17%
• Moat: Narrow | Uncertainty: High
SLB is the world’s leading oilfield-services provider, driven by core, digital, and new energy divisions. Despite short-term global slowdowns, it maintains strong positions in Middle East and Latin American offshore projects. Its digital solutions enhance margins and stabilize revenue against cyclical downturns.
Analyst View: SLB’s innovation and international reach make it a resilient long-term player in energy services.
4. ONEOK (OKE)
• Price/Fair Value: 0.78 (22% undervalued)
• Dividend Yield: 5.91%
• Moat: Narrow | Uncertainty: Medium
ONEOK specializes in natural gas gathering, processing, and transportation. Recent acquisitions (Magellan, EnLink, Medallion) expanded its midstream network. Its growth lies in linking U.S. Permian gas to Mexican LNG export pipelines — opening international revenue channels.
Analyst View: A strong dividend payer with growing exposure to global natural gas markets.
5. EOG Resources (EOG)
• Price/Fair Value: 0.79 (21% undervalued)
• Dividend Yield: 3.77%
• Moat: Narrow | Uncertainty: Medium
EOG remains one of the lowest-cost shale producers in the U.S., with high-quality assets in the Permian and Eagle Ford Basins. It returns over 70% of free cash flow to investors and prefers special dividends to overvalued buybacks.
Analyst View: EOG’s operational excellence and field-level decision-making culture make it an efficient, shareholder-friendly E&P leader.
6. Energy Transfer (ET)
• Price/Fair Value: 0.80 (20% undervalued)
• Dividend Yield: 7.83%
• Moat: None | Uncertainty: Medium
One of the largest U.S. pipeline operators, Energy Transfer’s strength lies in its vast midstream infrastructure. Future growth will come from natural gas transport projects like Desert Southwest Pipeline and data center gas supply contracts. It also continues to expand export and fractionation capacity in Mont Belvieu, Texas.
Analyst View: High-yielding and strategically expanding in gas logistics, Energy Transfer remains a steady income play.
7. ConocoPhillips (COP)
• Price/Fair Value: 0.83 (17% undervalued)
• Dividend Yield: 3.46%
• Moat: Narrow | Uncertainty: High
ConocoPhillips combines U.S. shale operations with international projects. Its natural gas exposure via LNG facilities in Qatar, Australia, and the U.S. gives it global diversification. The company focuses on disciplined oil growth while locking in long-term LNG contracts to hedge against price volatility.
Analyst View: A balanced oil and gas portfolio positions COP for long-term resilience.
8. TotalEnergies (TTE)
• Price/Fair Value: 0.85 (15% undervalued)
• Dividend Yield: 6.35%
• Moat: None | Uncertainty: High
The French integrated giant balances traditional oil expansion with renewable energy ambitions. Total plans to invest 30% of total spending in low-carbon energy by 2030, while still growing oil and LNG production by 3% annually. It is also building large solar and combined-cycle gas plants to double electricity generation.
Analyst View: A strong hybrid model combining energy transition leadership and cash-rich oil operations.
9. Halliburton Energy Services (HAL)
• Price/Fair Value: 0.88 (12% undervalued)
• Dividend Yield: 2.50%
• Moat: Narrow | Uncertainty: High
Halliburton dominates North American oilfield services. It focuses on electric fracturing technology to cut emissions and costs. Despite short-term challenges from OPEC+ capacity and reduced U.S. shale activity, its offshore international business is gaining importance.
Analyst View: A technology-driven service provider ready to benefit from offshore growth and energy efficiency trends.
10. MPLX (MPLX)
• Price/Fair Value: 0.93 (7% undervalued)
• Dividend Yield: 7.52%
• Moat: Narrow | Uncertainty: Medium
MPLX operates midstream assets and refineries, with 65% of its earnings from crude and refined product transport. Its partnership with ONEOK for a marine export terminal supports long-term revenue. The firm’s cautious project funding approach ensures solid returns.
Analyst View: Reliable income stock backed by stable cash flow and high-yield dividends.
⚙️ How to Find More Energy Stocks
Investors can:
• Explore Morningstar’s energy sector page for updates and earnings insights.
• Review its comprehensive energy stock database.
• Use the Morningstar Investor Screener to identify undervalued or high-moat opportunities.
• Read the Morningstar Guide to Stock Investing for a structured stock-picking approach.
Key Takeaway
The report highlights a balanced mix of exploration & production (E&P), midstream, and oilfield-service companies.
The major themes across these energy picks include:
• Undervaluation (10–33% discounts to fair value)
• Dividend strength (ranging from 2.2% to over 7.8%)
• Capital discipline and improved cost efficiency
• Transition readiness, especially for firms like TotalEnergies and Oxy
In short, the energy sector remains a solid choice for investors seeking inflation protection, income, and value opportunities—even amid global energy transition pressures.