2 Energy Stocks to Own for Decades and 1 That Underwhelm

Energy businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of commodity prices and economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 3.5% over the past six months. This drop is a stark contrast from the S&P 500's 16.3% gain.

The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Keeping that in mind, here are two energy stocks boasting durable advantages and one best left ignored.

Operating in some of the world's deepest waters with projects located up to 120 kilometers offshore, Kosmos Energy (NYSE:KOS) explores for, develops, and produces oil and natural gas from deepwater offshore fields.

Sales trends were unexciting over the last five years as its 8.4% annual growth was below the typical energy upstream and integrated energy company

Day-to-day expenses have swelled relative to revenue over the last five years as its EBITDA margin fell by 10.5 percentage points

Negative free cash flow raises questions about the return timeline for its investments

At $2.59 per share, Kosmos Energy trades at 5.3x forward P/E. Check out our free in-depth research report to learn more about why KOS doesn't pass our bar.

Backed by Warren Buffett's Berkshire Hathaway as a major shareholder, Occidental Petroleum (NYSE:OXY) explores for, develops, and produces oil, natural gas liquids, and natural gas, primarily in the United States and Middle East.

Annual revenue growth of 8.4% over the last ten years was superb and indicates its market share increased during this cycle

Unparalleled revenue scale of $24.47 billion gives it advantageous pricing and terms with suppliers

Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Occidental Petroleum is trading at $57.83 per share, or 11.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it's free.

Controlling roughly 450,000 net acres in America's most productive oil patch, Permian Resources (NYSE:PR) is an oil and natural gas producer that drills wells and extracts hydrocarbons from underground reservoirs in West Texas and New Mexico.

Annual revenue growth of 47.2% over the last ten years was superb and indicates its market share increased during this cycle

Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 76.1%

Strong free cash flow margin of 29.7% enables it to reinvest or return capital consistently

Permian Resources's stock price of $21.94 implies a valuation ratio of 9.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it's free.

WHILE YOU'RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.