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Commodity Investing

5 Energy Penny Stocks to Watch in 2022

Energy penny stocks might be worth your time if you’re a high risk-to-reward investor. Investing in them could reap huge rewards.

The energy sector soared last year. Despite plunging in 2020, the sector took off in 2021 as one of the top performing groups in the S&P 500. With the world opening up again, more people are looking forward to traveling, resulting in an increase in energy demand. Below you’ll find a list of energy penny stocks that offer high risk-to-reward opportunities.

In addition, if you want to see how your investments can grow, check out our investment calculator. It’s a free tool that can help you plan and reach your financial goals.

Looking at energy projects to find the best energy penny stocks

5 Energy Penny Stocks to Consider

  1. Southwestern Energy Company (NYSE: SWN)
  2. Kosmos Energy (NYSE: KOS)
  3. Denison Mines Corp. (NYSE: DNN)
  4. Ur-Energy Inc. (NYSE: URG)
  5. Uranium Energy Corp. (NYSE: UEC)

We’ll look at these companies in more detail below. To begin, let me show you why energy stocks as well as penny stocks can both be excellent investments. Additionally, combining both of them can maximize your profits.

Energy Penny Stocks: Why Invest in Them?

Energy stocks are undervalued. Moreover, energy stocks were some of the top performers of 2021. According to U.S. News, oil and gas companies accounted for three of the top ten performing S&P 500 stocks.

High demand and low supply have bumped energy prices up big time. Specifically, oil prices have risen more than 45% since last December. As a result, some of these companies’ revenue and profits have soared in recent years… and investors want to get a piece of the action.

Penny stocks have a low barrier to entry. For a few dollars you can buy a stake in many companies. So, this makes them a perfect starting point for investors who can’t afford blue chip stocks.

It’s also important to understand penny stocks are more volatile. They have larger price swings and this can lead to larger losses or gains. That’s why it’s vital to find the stocks with the best risk-to-reward opportunities…

Energy Penny Stock Highlights

Southwestern Energy Company

Southwestern Energy Company is an energy company in the United States. The company engages in natural gas and crude oil exploration, development and production. Its operating segments are exploration, production and marketing.

SWN develops unconventional natural gas reservoirs in Pennsylvania and West Virginia. Additionally, it engages in marketing of natural gas, oil and NGLs. The company serves other energy companies, utilities and industrial buyers. In recent months, SWN announced the acquisition of Montage Resources.

Southwestern has four main principles… creating sustainable value, protecting financial strength, increasing scale and progressing best-in-class execution. In other words, these values make the company an interesting energy penny stock to consider.

Kosmos Energy

Kosmos Energy is a leading deepwater oil and gas company. Its main focus is on exploration and production to meet the world’s growing demand for energy. The company focuses on resources along the Atlantic Margins.

Kosmos’ key assets include a world-class gas development project offshore Mauritania and Senegal. Additionally, it also has a proven basin exploration program in Equatorial Guinea, Ghana and the U.S. Gulf of Mexico. The company is expanding its exploration portfolio in established, emerging and frontier basins along the Atlantic Margin. In conclusion, this company’s growing portfolio positions this energy penny stock well for the near future.

Denison Mines

Denison Mines is a uranium exploration and development company. Its primary resources are in the northern Saskatchewan region of Canada.

The company has a large portfolio of uranium mining properties. This includes a 22.5% stake in the McClean Lake joint venture. Additionally, the venture holds several uranium deposits and the McClean Lake uranium mill, which processes ore from the Cigar Lake mine. The company also has a 25.17% interest in the Midwest deposits and a 66.9% interest in the THT and Huskie deposits.

The company is in a strong position to help support the transition to clean energy. Its Wheeler River uranium project has the potential to compete with the lowest cost uranium mines and development projects. Furthermore, Wheeler River is designed as one of the most environmentally sustainable mining operations in the world.

Ur-Energy

Ur-Energy is an exploration stage mining company. It engages in uranium mining, recovery and processing activities. This includes the acquisition, exploration and development of uranium mineral properties in the United States.

Ur-Energy’s Lost Creek facility has produced and shipped more than 2.6 million pounds of uranium ore. Additionally, the company is continuing efforts toward its LC East project and the Shirley Basin project.

The uranium energy industry’s potential is mostly untapped right now. Uranium is one of the most efficient ways of producing power but it doesn’t have the best public image. However, if that changes, this alternative energy penny stock could skyrocket.

Uranium Energy

Uranium Energy is a U.S. based uranium mining and exploration company. It manages one of the largest databases of historic uranium exploration and development in the country. The company is using this knowledge base to acquire and explore properties throughout the southwestern U.S.

The company has properties primarily in Texas, Wyoming, New Mexico, Arizona and Colorado. Furthermore, this region has been one of the best areas to mine uranium in the country.

The EVP of UEC, Scott Melbye, stated that “nuclear power can work hand in hand with other green technologies, like wind and solar, to help advance the American clean energy revolution.” In conclusion, the company’s environmentally friendly strategy gives this stock a lot of potential.

Final Thoughts on Energy Penny Stocks

The energy sector is one of the top performers in the S&P 500. These are just a handful of energy penny stocks to watch.

Importantly, if you’re interested in investing in energy penny stocks, you’re going to need to have some risk tolerance. These stocks carry potential for big returns, but also for big losses.

However, diversifying your portfolio can help you minimize risk. Furthermore, you can reduce portfolio swings by investing in several energy penny stocks. For instance, take a look at these electric vehicle ETFs to diversify your portfolio and reduce some of the volatility.


About

Aimee Bohn graduated from the College of Business and Economics at Towson University. Her background in marketing research helps her uncover valuable trends. Researching IPOs and other trends has been her primary focus over the past year. When Aimee isn’t writing for Investment U, you can usually find her doing graphic design or traveling with friends.

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