Population growth will drive global demand for natural gas, oil, and nuclear consumption up 32% during the next three decades, according to ExxonMobile
Other highlights from Exxon: Gas from shale and other unconventional rock formations will account for 30% of global gas production by 2040. Together, oil, gas, and coal are predicted to contribute 78% of global fuel supplies in 2040. Nuclear will meet about 8% of demand.
Oil will remain the most widely used fuel, even as the expanded use of hybrid and fuel-efficient cars breaks onto the scene.
Exxon reported that India would lead the growth as the country's energy usage is expected to double by 2040. Other increases are expected from Africa, Latin America, and the Middle East. However, "fuel consumption will decline in the U.S. and Europe, according to the forecast."
Energy stocks fell back in the face of lower equities prices and oil futures moving under $100 a barrel (via MarketWatch).
"Goldman Sachs on Thursday said it's resuming coverage of oil service stocks with an attractive rating," reports Marketwatch. "Analysts placed Halliburton (HAL) 0.39% and Helmerich & Payne (HP) on their Americas Conviction Buy list."
So how will this trend, or at least the trend predictions, affect oil and gas companies?
We wanted to find the companies within the oil and gas industries that may be best positioned for an increase in demand. To do so, we analyzed their profitability.
One of analysts' favorite profitability tools is DuPont analysis -- it's a way to look at changes in return on equity (ROE) profitability [i.e. net income/equity] by attributing those changes to certain sources. Some of the sources are more sustainable than others, thereby giving an analysis of strength in increasing profitability.
All of the companies mentioned below have seen improving DuPont trends -- rising profitability and improving efficiency, all while reducing their leverage (i.e., a falling assets/equity ratio).
Do you think there's more upside to these names? Use this list as a starting point for your own analysis.
List sorted by change in ROE. (Click here to access free, interactive tools to analyze these ideas.)
1. Western Refining
2. TETRA Technologies
4. Key Energy Services
5. Plains All American Pipeline
6. Genesis Energy
7. Baker Hughes
8. Targa Resources Partners
9. CARBO Ceramics
10. Complete Production Services
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Profitability data sourced from Fidelity.