Dream Stocks for Energy Investors

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 150,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for energy-focused companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:

• A market cap of at least $100 million.
• A three-year revenue growth rate of at least 20%.
• A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned.

Data and star rankings from CAPS as of Feb. 26.

Linn Energy
With a strong dividend currently yielding about 9.3%, many CAPS members like the cash that Linn Energy gives back to its owners, on top of its potential for further growth. The independent oil and gas company increased its production in 2009 and boosted its reserves to 1,712 billion cubic feet equivalent at the end of the year, up from 1,660 billion in the prior year. Linn has grown its reserves by a huge amount in recent years, and expects more acquisition opportunities to provide further growth.

In CAPS, nearly 98% of the 794 members rating Linn Energy are bullish.

McMoRan Exploration
McMoRan has been a favorite of many CAPS members because of its massive ownership of acreage in the Gulf of Mexico and its ultradeep drilling abilities to find oil and gas. The Gulf has been providing solid discoveries for companies like Anadarko Petroleum (NYSE: APC), Chevron, and BP recently, and McMoRan, along with its partners Energy XXI (Nasdaq: EXXI) and Plains Exploration & Production, has come up with a huge find of its own. After announcing an initial find at its Davy Jones prospect, it recently said it drilled deeper and found even more hydrocarbon-bearing sand, potentially boosting reserves even further.

The company looks to spend more money on its prospects in the region, and investors are bullish about the potential return on investment, as 96% of the 476 CAPS members rating McMoRan expect it to outperform the market.             

National Oilwell Varco
Investors like signs that things may be improving for oilfield equipment and services company National Oilwell Varco after a precipitous drop in demand that affected many energy-related companies, including oil majors like ExxonMobil (NYSE: XOM).  The company has been seeing an uptick in orders lately and capped off 2009 with $2.6 billion in cash, even after dishing out a special dividend in December. Like peers such as Halliburton (NYSE: HAL), National Oilwell Varco holds an upbeat view of this coming year and the company is poised to benefit from any recovery in demand. It’s also looking to continue picking up smaller companies that can help bolster its growth prospects.  

As such, many CAPS members are bullish on its potential, with 98% of the 2,959 members rating National Oilwell Varco believing it will outperform the broader market.     

Let 150,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen. But individual investors are still the best judges of what to do with their own money. Fools should always perform their own due diligence.

Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.