3 Great Energy Stocks No One Is Talking About

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The energy markets have been in turmoil for months now, as plunging oil prices have wrought havoc throughout the industry. With some prognosticators expecting crude to fall to $10 per barrel while others expect a quick recovery, bets on energy stocks have been fast and furious.

Yet amid this turmoil, many energy stocks are going unnoticed even though they have a lot of potential. We asked three Motley Fool contributors for their views on great energy stocks that have largely been ignored during the oil rout. Let's take a closer look at their picks and why they think the stocks could see big gains ahead.

Travis Hoium (Total): When you think of big oil companies names like ExxonMobil, Chevron, and BPcome to mind. Total is often a forgotten about player but it has a lot of the same exposure as its larger rivals and some interesting investments up its sleeve.

One of the first reasons to like Total over other big oil stocks is simply value. Shares are trading at 12.2 times 2015 earnings estimates, which is lower than ExxonMobil, Chevron, or BP and the stock's 5.2% dividend yield is second only to BP's 5.7% yield. If oil prices recover, Total will benefit along with its larger counterparts.

But there's another reason to like this overlooked oil company. It's been the most aggressive in investing in energy products that go beyond oil. While BP is getting out of solar and Chevron is shutting down its renewable energy business, Total is doubling down. It owns two thirds of SunPower, the industry's panel efficiency leader and one of the largest and most diverse players in solar. It also has a number of investments in energy storage companies like Stem, Sunverge, and Aquion Energy. Then there's synthetic biology company Amyris, which is working on biofuels among other exciting new products.

Total doesn't get a lot of headlines, especially here in the U.S., but it's a big oil company that shouldn't go overlooked, especially because of its investments in companies that could be the future of energy.

Daniel Miller (Devon Energy): Devon Energy has been widely overlooked simply because it's a company that began switching its focus from natural gas production to oil, and then prices of oil hit the floor. However, many investors don't realize that because of Devon's hedging -- more than 50% of its 2015 oil is protected at $91 per barrel -- which will support its strong cash flow.

Further, Devon Energy posted fourth-quarter results that surpassed expectations as well as company guidance. Total production jumped 20% year over year to 664 Mboe/d, mostly because of the company's Permian and Eagle Ford liquids-rich assets. That looks to continue this year due to more growth in its oil production.

Chart source: Devon Energy's fourth-quarter investor presentation.

One of the most attractive things about owning Devon Energy is its portfolio of mixed oil and natural gas assets, and more importantly that the assets are both near-term and longer-dated projects. Devon also has midstream assets -- that reported record operating profits in the fourth-quarter -- which help the Oklahoma based company optimize revenue generated for its oil and gas production.

Within a few years it's likely that Devon's oil production will generate more than 60% of the company's production mix, and because of that, the big risk is a prolonged period of weak oil prices. While the company should be financially set up to withstand such an event, it would certainly put pressure on profits and development plans of its emerging assets.

However, if oil prices begin to move higher, savvy investors can pick up Devon Energy as a very solid play in the oil rebound. Morningstareven rates Devon Energy's fair value at $93, which is substantially higher than the roughly $60 it trades for today.

Dan Caplinger (EOG Resources): One energy company that has gotten whipsawed in recent years is EOG Resources , which has felt the sting of shifting trends in the oil and gas industry on multiple occasions. Historically, EOG Resources had a lot of exposure to natural gas, and when prices of the clean-burning fuel plunged, EOG's growth plans took a hit. In response, EOG shifted its focus more toward oil and liquids, and that helped send the stock climbing much higher -- until the price of crude started to fall, once again calling the company's long-term strategy into question.

Yet the reason why EOG doesn't belong in the same category as many other energy stocks is that it has the financial capacity to choose to wait for better market conditions in the oilpatch. CEO Bill Thomas said just last month that he's convinced that oil prices won't stay this low for long, and once it does, EOG will be ready to return to its past growth trajectory. In the meantime, though, EOG isn't simply selling all the oil it can produce at rock-bottom prices. By showing restraint and patience, EOG Resources is putting itself in a great position to profit even when other, less confident companies are panicking, and that's a recipe for long-term share-price gains once oil recovers.

The article 3 Great Energy Stocks No One Is Talking About originally appeared on Fool.com.

Dan Caplinger has no position in any stocks mentioned. Daniel Miller owns shares of Devon Energy. Travis Hoium owns shares of AMYRIS INC COM, SunPower, and Total (ADR). The Motley Fool recommends Chevron and Total (ADR). The Motley Fool owns shares of Devon Energy and EOG Resources,. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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