The Best LNG Stocks for Long Term Growth

Energy Investing
by Tim Plaehn
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Financial data and insight provider VettaFI recently launched the Alerian Liquified Natural Gas Index. This is the first index focused on the high-growth liquified natural gas (LNG) industry.

LNG provides a clean energy source that can be transported anywhere in the world and then regasified to produce electricity or heat buildings. LNG can become a new energy source anywhere in the world in a reasonably short time. When Russia invaded Ukraine and Russian gas was cut off from Western Europe, the European countries were able to replace the Russian gas with imported LNG quickly.

Developing-world countries and economically depressed regions can also upgrade their energy usage to clean, reliable natural gas by importing LNG.

Here’s my favorite pick in this industry that’s growing at a rapid pace and throwing off lots of income…

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For example, New Fortress Energy (NFE) has undertaken a project to convert Puerto Rico from burning diesel in old, inefficient power plants and transition the energy economy to clean natural gas with imported LNG.

According to S&P Global Commodity Insights, LNG demand is expected to grow from 399 million tons in 2022 to 627 million tons by 2035. The forecast provides 57% growth in just over a decade. A press release from Shell Plc (SHEL) noted that European countries imported 121 million tons of LNG in 2022, a 60% increase over the previous year. The press release noted that industry forecasts have LNG demand increasing to 650 to more than 700 million tons by 2040.

LNG production and demand growth are inevitable as the world will require ever more clean, reliable energy. If developing countries want to improve living standards, energy consumption must increase by magnitudes.

A new (launched September 28) ETF will track the Alerian Liquified Natural Gas Index. The fund is the Roundhill Alerian LNG ETF (LNGG). LNGG is appealing because LNG gasification, transport, and regasification is a global infrastructure operation. The U.S. is the largest LNG exporter, with Australia and Qatar as significant players.

I also like to look at ETF holdings to find individual stocks in which to invest. Here are the top ten for LNG:

I like New Fortress Energy Inc. (NFE), a portfolio stock in my Monthly Dividend Multiplier service.

Author: Tim PlaehnTim is the lead investment research analyst for income and dividend investing at Investors Alley. He is the editor for The Dividend Hunter, an investment advisory focused on creating a high-yield income stream and it's companion service The Dividend Hunter Insiders, Weekly Income Accelerator, a covered call trading service, and for investors looking for long-term total returns from their income investments using stocks with ever-growing dividend payments, he offers Monthly Dividend Multiplier. He co-edits POWR Income with Jay Soloff. Prior to his work with Investors Alley, Tim was a stock broker, a Certified Financial Planner, and F-16 Fighter pilot and instructor with the United States Air Force. During his time in the service he was stationed at various military locations in the U.S., Europe, and Asia. Tim graduated from the United States Air Force Academy with a degree in mathematics. In his free time he tours the United States parks, campgrounds, and wilderness areas in his travel trailer.
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