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The broader markets had a dismal month of January - the Dow Jones Industrial Average was down 5.3% and the S&P 500 dipped 3.6% - but these liquefied natural gas (LNG) stocks all boasted strong returns.
The outlook for LNG stocks continues to look bright as well. Increased demand for natural gas in China, the increased supply of shale gas in the United States, and the high number of export facilities awaiting approval for construction in the United States are all bullish signs for LNG investors.
These five LNG stocks vastly outperformed the markets in January and have room to continue upward...
Top LNG Stocks in January 2014
DHT Holdings Inc. (NYSE: DHT) posted an impressive 20% gain in January, when the broader markets were all posting losses. DHT started 2014 trading at $6.84 and finished the month at $8.19 per share. Shareholders are also provided a modest dividend yield of 1%.
DHT is a Bermuda-based shipping company that owns eight double-hull crude tankers. As the LNG industry continues to grow and the United States begins exporting LNG globally, transportation will be in high demand. That makes LNG shipping stocks like DHT strong plays moving forward.
Dominion Resources, Inc. (NYSE: D) received government approval in September 2013 to convert its LNG import facility in Cove Point, Md., into an export facility. After the $3.5 billion construction project is completed, Dominion is expected to begin exporting in 2017. Some of Dominion's more notable customers include the Japanese companies Tokyo Gas and Sumitomo and the Indian energy company Gail.
In January, D stock gained 5%. The stock has climbed ever further in February and currently trades at $69.29. D stock opened 2014 at $64.69. Dominion is also one of our favorite LNG dividend stocks, offering investors a quarterly dividend of $0.60, or 3.5%.
Sempra Energy (NYSE: SRE) is currently awaiting government approval on its Cameron LNG export facility in Louisiana. This is another LNG project that will convert an import facility into an export facility. Sempra is working with the Japanese companies Mitsui and Mitsubishi on the project, and they will be two of Sempra's largest customers when the facility is finished.
In January, SRE stock was up 3.3%. The stock has continued higher through February and is currently priced a $94.16 a share. Shareholders are given a quarterly dividend payment of $0.63, or 2.7%.
Cabot Oil & Gas Corp. (NYSE: COG) reached a 20-year agreement with Japan to export Liquefied Natural Gas back in December. Cabot is expected to begin exporting LNG in 2017 when its Dominion Cove facility in Lusby, Md., is completed. Before the deal, Cabot was primarily involved with oil and gas production in Pennsylvania, Oklahoma, and Texas.
The LNG news has rewarded Cabot shareholders who watched COG stock gain 3.2% in January. In fact, COG stock finished the month of January near its 52-week high of $41.78. In the past 12 months, COG stock has climbed more than 43%.
Cheniere Energy Inc. (NYSE: LNG) finished the month of January with a modest return of 1.9%. Cheniere was the first company to receive approval from the U.S. government to pursue an LNG export facility. Its Sabine Pass project in Louisiana is expected to export 500 million cubic feet of LNG when it is completed in 2015. The company is also working toward another export facility in Corpus Christi, Texas.
LNG stock has been on Money Morning readers' radar since Global Energy Strategist Dr. Kent Moors recommended the stock at $6 per share in 2010. LNG currently trades at $44.68 and is one of the strongest liquefied natural gas stock plays.
Do you invest in liquefied natural gas stocks? Join the conversation on Twitter @moneymorning by using #LNG.
Volatility has defined the markets so far in 2014, but that doesn't mean investors should panic. You can take profits while everyone else is taking cover.