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Energy is always in demand. But which energy companies will be the winners? Here we look at six energy stocks that investors may be wise to buy and hold forever. Each of these names has scale advantage over the competition, allowing for long run profits.

Exxon Mobil Corp (NYSE:XOM): Shares are trading at $69.80 at the time of writing, in the middle of their 52-week trading range of $58.05 to $88.23. At the current market price, the company is capitalized at $339.38 billion. Earnings per share for the last fiscal year were $7.59, placing the shares on a price to earnings ratio of 9.20. It paid a dividend of $1.88 (yielding 2.70%).

The oil and gas giant is a company that excels amongst its peer group. Its operating margin of 12.74% compares well with other giants such as BP (NYSE:BP), which has a margin of 6.18%, and it doesn’t suffer the same poor safety record. BP could suffer from the Gulf disaster for years to come. Exxon, on the other hand, would benefit from increases in the price of natural gas (at historic lows) and oil, and be able to continue to reward shareholders with a healthy dividend without fear of further costly litigation as is the case with BP. Exxon is a company that offers strong dividends with the chance of strong share price growth: one of the best energy stocks in the market.

Chevron Corp (NYSE:CVX): Shares are trading at $93.29 at the time of writing, against their 52-week trading range of $72.57 to $109.94. At the current market price, the company is capitalized at $186.86 billion. Earnings per share for the last fiscal year were $11.45, placing the shares on a price to earnings ratio of 8.15. It paid a dividend last year of $3.12 (a yield of 3.30%).

Despite the more than doubling of minimum bids on oil leases in the Gulf, where the company is the third largest lease holder, the future looks bright for Chevron. The yield is higher than that of BP and Exxon Mobil, and has been increased for 14 consecutive years. It operating margin is better than both its main competitors, and the prospect of a generally firm oil price in years to come, despite any economic slowdown, bodes well for the company’s fortunes.

BHP Billiton (NYSE:BHP): Shares are trading at $77.61 at the time of writing, against their 52-week trading range of $64.14 to $104.59. At the current market price, the company is capitalized at $215.87 billion. Earnings per share for the last fiscal year were $6.13, placing the shares on a price to earnings ratio of 12.66. It paid a dividend last year of $1.84 (a yield of 2.40%).

BHP is currently acquisitive, having recently bought Petrohawk Energy. However, this purchase is far smaller than the proposed purchase of Australia’s MacArthur Coal by Peabody (NYSE:BTU). Another rival, Anglo American (NYSE:AA), is contemplating joining the bidding for MacArthur (OTC:MACDY). This may be a good move by the two bidding companies, provided demand for coal stays strong. Any weakening of demand, however, could put short-term pressure on finances as the winning bidder seeks to recoup the bid price. BHP’s diverse portfolio, which includes precious metal mining, should make it attractive to investors.

Cloud Peak Energy (NYSE:CLD) Shares are trading at $17.72 at the time of writing, against their 52-week trading range of $14.77 to $24.69. Earnings per share for the last fiscal year were $2.07, placing the shares on a price to earnings ratio of 8.56. It paid no dividend last year.

The shares stand at a price to earnings ratio below the industry average of 12.47 and well below that of coal mining competitor Arch (NYSE:ACI) at 18.20. Its operating margin of 16.07% is better than that of Arch (12.59%). With demand from India and China set to continue, the shares represent good value and should out-perform those of Arch in the medium to long term.

PetroChina Co Ltd (NYSE:PTR): Shares are trading at $118.98 at the time of writing, against their 52-week trading range of $106.72 to $158.83. At the current market price, the company is capitalized at $220.13 billion. Earnings per share for the last fiscal year were $12.20, and it paid a dividend of $5.04 (yielding 4.20%). The company concentrates its production and distribution of oil and gas in China, rapidly becoming the world’s largest economy. Its dependence on a single geographic location would normally be a weakness, but with China growing strongly and PetroChina’s larger market presence than its competitors such as Chevron in the region, this could be a major plus point for the shares in a weakening global economy. The dividend yield is also a major plus, and the company is likely to continue to pay strong dividends in the future.

Pioneer South West Energy Partners L.P. (PSE): Shares are trading at $26.59 at the time of writing, toward the bottom end of their 52-week trading range of $24.25 to $35.87. At the current market price, the company is capitalized at $880.47 million. Earnings per share for the last fiscal year were $1.55, and it paid a dividend of $2.04 (a yield of 7.70%). The company is one of the niche energy companies that outshine the bigger competition. Its oil properties throughout the United States are well managed, and the company pays a high dividend from profits and built up cash reserves to its shareholders. When comparing it to far larger rival Anardarko (NYSE:APC), its gross margin of 74.07% on a par with its competitor’s 80.02%. However, its operating margin of 26.96% versus Anardarko’s 18.28%, and its far more aggressive dividend policy (last year Anardarko paid out a paltry $0.36) suggest they are the better buy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 6 Buy-And-Hold-Forever Energy Stocks