+430% YTD Return: 2 Energy Stocks You Can’t Afford to Miss

Growth investors can’t miss out on two energy stocks that have delivered returns of more than 430% thus far in 2021.

| More on:

Last year would have been a banner year for the Toronto Stock Exchange without the global pandemic. In 2021, no one expected the index to have an explosive start, but it did. We’re in the fourth quarter, and the year-to-date (YTD) gain is over 20%. Growth investors in particular are having a field day. The top 100 stocks have returns of at least 128%.

Most of the top performers are in the mining or energy sectors. However, if you base your selection on sector performance, the red-hot energy sector stands out. Its YTD return is 70.66% compared to the mining or basic materials sector’s 0.96%.

If you need to narrow down the individual prospects, Baytex Energy (TSX:BTE)(NYSE:BTE) and Crew Energy (TSX:CR) are the logical choices. The energy stocks trade at absurdly low prices, but you can’t miss out on them because the YTD return is between 430% and 450%. A $10,000 investment on December 31, 2020, is worth as high as $55,000 today.

Remarkable comeback

A share of Baytex Energy costs only $0.45 a year ago but has appreciated by 744.44% in 12 months. The $2.16 billion company considers itself as a top-tier oil producer in North America. It’s 28 years old and engages in the acquisition, development, and production of crude oil and natural gas. The operations are in the Western Canadian Sedimentary Basin and Eagle Ford in the United States.

Like most energy companies, Baytex suffered enormous losses in 2020. However, nearly all of them are staging comebacks this year due to the rebound in oil prices. Total petroleum and natural gas sales reached $827 million in the first half of 2021. It represents a 69% increase from the same period in 2020. Management reported a net income of $1 billion compared to a $2.63 billion net loss.

The bulk of income was in Q2 2021. Ed LaFehr, Baytex’s president and CEO, said, “During the second quarter, we delivered strong operating results and substantial free cash flow. Our free cash flow profile continues to improve, resulting in accelerated debt reduction.” Management expects to generate over $350 million in free cash flow in 2021.

Record adjusted funds flow

Crew Energy is a small-cap stock that boasts outrageous returns. The current share price of $2.97 is 607.1% higher than a year ago, while the YTD gain is 430.4%. Market analysts recommend a buy rating and forecast a return potential of between 32.7% and 102% in the next 12 months.

The $460.33 million light oil and natural gas producer operates in the Montney resource, in northeast B.C. Like Baytex, Crew Energy’s financial performance this year has vastly improved from last year. In the first half of 2021, sales growth (petroleum and natural gas) was 144.6% compared to the same period last year.

Net income went down 89.9% to $21.78 million from $ 216.7 million in the first six months of 2020. In Q2 2021, Crew’s adjusted funds flow increased by a whopping 451%. Its president and CEO Dale Shwed said the immediate plan is to increase production and reduce unit costs to expand margins. The result should be sustainable value for all stakeholders.

Outsized returns

Baytex Energy and Crew Energy could end 2021 with outsized returns. Oil prices are near multi-year highs, so their stock prices could soar sky high.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Energy Stocks

engineer at wind farm
Energy Stocks

Invest $20,000 in This Dividend Stock for $100 in Monthly Passive Income

This dividend stock has it all – a strong outlook, monthly income, and even more to consider buying today.

Read more »

A worker overlooks an oil refinery plant.
Energy Stocks

Is Imperial Oil Stock a Buy, Sell, or Hold for 2025?

Valued at a market cap of $55 billion, Imperial Oil pays shareholders a growing dividend yield of 2.4%. Is the…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Where Will Imperial Oil Stock Be in 1 Year?

Imperial Oil is a TSX energy stock that has delivered market-thumping returns to shareholders over the last two decades.

Read more »

Pumpjack in Alberta Canada
Energy Stocks

1 Magnificent Energy Stock Down 17% to Buy and Hold Forever

Down over 17% from all-time highs, Headwater Exploration is a TSX energy stock that offers you a tasty dividend yield…

Read more »

Pumpjack in Alberta Canada
Energy Stocks

Is Cenovus Energy Stock a Good Buy?

Cenovus Energy (TSX:CVE) stock is primed for capital gains and strong total returns in 2025, driven by strategic buybacks and…

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

2 High-Yield Dividend Stocks That are Screaming Buys Right Now

Natural gas stocks like Peyto Exploration and Development are yielding above 7% today and look undervalued as natural gas strengthens.

Read more »

chart reflected in eyeglass lenses
Energy Stocks

Best Stock to Buy Right Now: Canadian Natural Resources vs Cenovus?

Want to invest in Canadian energy? Canadian Natural Resources and Cenovus Energy are two of the largest, but which one…

Read more »

oil pump jack under night sky
Energy Stocks

Where Will Cenovus Stock Be in 1/3/5 Years? 

Let's dive into whether Cenovus (TSX:CVE) stock is worth buying right now and where this stock could be headed over…

Read more »