Natural gas is a vital fuel source. We use it to produce power, heat our homes, and for other residential, commercial, and industrial functions. It's an abundant and cheap fossil fuel.
Natural gas may be a critical "bridge fuel" during the energy transition to lower-carbon alternatives. It can help bridge the gap by supplying cleaner baseload power and offsetting the intermittency issues of wind energy and solar power. In areas where renewable energy is not available, there is often a need for natural gas.
Natural gas stocks are broadly categorized into three categories, although many companies actually perform a combination of these activities. Upstream gas stocks explore and produce gas. Midstream companies store and transport gas, and downstream companies refine and distribute gas.
A brief overview of the natural gas market
Natural gas is an abundant, versatile fuel, but it has limitations. In its gaseous form, it must travel by pipeline, making infrastructure essential for the natural gas industry.
Pipeline companies must build and operate midstream infrastructure, including pipelines, processing plants, and storage facilities, to transport gas from production basins to end markets. Meanwhile, natural gas needs to be converted into a liquid for transportation overseas.
Infrastructure companies often make the best natural gas stocks. This is because they're less susceptible to the energy industry's cyclical nature and pricing volatility. Most natural gas infrastructure companies generate stable cash flow by collecting fees as natural gas moves through their network, giving them a "toll booth" business model.
Top natural gas stocks in 2025
Some of the best natural gas stocks for investors to consider buying include:
| Name and ticker | Market cap | Dividend yield | Industry |
|---|---|---|---|
| Cheniere Energy (NYSE:LNG) | $46.3 billion | 0.95% | Oil, Gas and Consumable Fuels |
| EQT (NYSE:EQT) | $36.8 billion | 1.08% | Oil, Gas and Consumable Fuels |
| Kinder Morgan (NYSE:KMI) | $60.4 billion | 4.29% | Oil, Gas and Consumable Fuels |
1. Cheniere Energy
NYSE: LNG
Key Data Points
2. EQT Corporation
NYSE: EQT
Key Data Points
3. Kinder Morgan
NYSE: KMI
Key Data Points
The secret to finding top natural gas stocks
The International Energy Agency (IEA) projects a 0.5% annual rise in natural gas demand from 2023 to 2035 in its Stated Policies Scenario (STEPS). However, natural gas demand is expected to peak around 2030.
Identifying the best natural gas stocks to invest in involves assessing the key parameters that drive long-term growth. Breaking it down into a discussion of the three categories noted above, the following considerations apply:
- Upstream gas companies must demonstrate that they have low production costs and can grow their reserves over time, since the value in most upstream companies lies in their reserves and the ability to produce from them profitably.
- Midstream gas companies often have long-term contracts with customers, providing them with a reliable stream of income. The key factors here are their customer relationships, ability to develop infrastructure (such as export terminals), and the long-term demand for gas volumes.
- Downstream gas companies are often highly regulated and very stable companies. Investors need to keep an eye on interest rates, as downstream businesses typically carry a significant amount of debt, and investors often purchase them for their dividend yield. As such, they can underperform when rates increase.
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How to invest in natural gas stocks
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
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