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Throughout the United States' current natural gas boom, Money Morning experts have been recommending liquefied natural gas (LNG) stocks to capitalize on the U.S. energy industry's growth.
Many of those recommendations have paid off handsomely.
For instance, Money Morning's Global Energy Strategist Dr. Kent Moors first told readers about Cheniere Energy Inc. (NYSE: LNG) back in 2010. In the past four years, that stock is up an incredible 2,241%.
Likewise, Dominion Resources Inc. (NYSE: D) has gained nearly 40% since Moors mentioned the stock in February 2012.
And even though LNG stocks have posted serious gains in the past few years, there are still profits to make from LNG stocks.
If you know where to look...
While some of the most popular LNG stocks are those involved in producing and transporting LNG, Money Morning's Executive Editor Bill Patalon has found a different way to play this energy subsector...
A New Way to Invest in LNG Stocks Now
Patalon currently has his sights set on LNG infrastructure companies. He admits they might not sound very exciting - but, when it comes to investing, boring can be a very good thing.
"When it comes to investments, nothing is as boring to talk about as 'infrastructure' - a clunky bit of jargon that refers to such civil-engineering mainstays as pipelines, bridges, roads, reservoirs, ports, and, yes, storage tanks," Patalon said.
"The term is a yawner, but there's money behind it. While state and federal nondefense infrastructure spending has plummeted since 2008, it's still running at a rate of about $225 billion a year."
That $225 billion annual rate isn't the only eye-catching statistic. Make no mistake, LNG production is going to soar in the coming decade.
"The worldwide LNG market has doubled since 2000, and I expect it to double again by 2025. China alone should triple its current use of natural gas by 2020," Patalon said.
"And here at home, according to BP's Energy Outlook 2035, which was published in January, the United States will double its production of shale gas by 2035, becoming the world's largest natural gas producer."
That huge boom in LNG production has energy companies clamoring to build export facilities as quickly as possible. Currently, more than 20 companies are waiting for government approval to begin constructing LNG facilities in the United States.
"Once federal and state regulators approve those facilities, someone will need to design, engineer, and build them," Patalon said. "If you're looking to enter this burgeoning market, but don't like messing with energy stocks, which can be volatile, then "boring" infrastructure stocks can offer a great alternative."
As energy companies rush to construct LNG export facilities in the coming years, LNG infrastructure stocks are poised to capitalize... and here's a stock leading this subsector now...
The Best LNG Stock to Play the Infrastructure Boom
LNG Stocks to Buy: Chicago Bridge & Iron Co. (NYSE: CBI) designs, builds, repairs, and modifies petroleum terminals, refinery pressure vessels, cryogenic storage facilities, and elevated water storage tanks. In regard to LNG, CBI has already designed and constructed LNG facilities worldwide and has generated tens of billions of dollars doing so.
CBI was behind the construction of Europe's biggest LNG terminal, the South Hook LNG facility in the UK, and Peru LNG, which was the first facility in South America.
CBI did miss on some revenue and earnings per share estimates in the first quarter this year, which has sent the stock down 17% year to date. But according to Patalon, that gives investors a chance to buy in at a discounted price.
"For the first quarter alone, CBI saw its engineering, construction, and maintenance revenue come in at $4.9 billion - a year-over-year increase of 393%," Patalon said. "CBI has seen its profits grow at a 17% annual rate over the past five years; net income jumped from $301.66 million in 2012 to $454.1 million last year."
With a strong history building LNG facilities internationally, CBI is poised to ride the U.S. LNG infrastructure wave in the coming years. Currently, CBI trades just below $69 per share.
Have you been investing in LNG stocks? Do you plan to buy into LNG infrastructure plays? Join the conversation on Twitter @moneymorning using #LNG.
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