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Today’s article reviews five energy stocks to see if they are qualified to be great long term investments. Here is my analysis of several potential winners in the energy space:

Contango Oil & Gas Company (NYSEMKT:MCF) Contango has a market cap of $862.30 million with a price to earnings ratio of 13.33. The stock has traded in a 52 week range between $49.54 and $67.25. The stock is currently trading around $55. The company reported second quarter revenues of $42.1 million compared to revenues of $41.2 million in the second quarter of 2010. Second quarter net income was $17.5 million compared to net income of $15.4 million in the second quarter of 2010.

One of Contango’s competitors is the Newfield Exploration Company (NYSE:NFX). Newfield is currently trading around $41 with a market cap of $5.47 billion and a price to earnings ratio of 14.41. Either Newfield or Contango pay a dividend.

Contango explores and produces natural gas and oil primarily in the Gulf of Mexico. For the fiscal year ending on June 30th, the company increased revenues by 26.7% and net income by 30.7%. The company’s balance sheet is impressive. Contango has over $150 million in cash and absolutely no debt. In spite of the company’s 2011 earnings uptick, the stock price has remained relatively steady, and is up by 7.61% over the last 52 weeks and 11.5% over the last three years. Contango is a solid company that has made a profit in seven out of the last ten years. However, the company’s stock price has been flat and the company does not pay a dividend. I would not purchase this stock at this time. I rate Contango Oil & Gas Company as a hold.

El Paso Corporation (EP) El Paso has a market cap of $13.63 billion with a price to earnings ratio of 25.39. The stock has traded in a 52 week range between $12.00 and $21.54. The stock is currently trading around $18. On August 4th the company reported revenues of $1.24 billion, compared to revenues of $1.02 billion in the second quarter of 2010. Second quarter net income was $262 million compared to net income of $147 million in the second quarter of 2010.

One of El Paso’s competitors is Williams Companies Inc. (NYSE:WMB). WMB is currently trading around $25 with a market cap of $14.79 billion and a negative price to earnings ratio. WMB pays a dividend which yields 3.1% versus El Paso whose dividend yields 0.20%.

El Paso reported net income in 2010 of $721 million up by $1.21 billion from 2009 net income of $-576 million. The second quarter net income was up by 322% from the first quarter of 2010. The company has been profitable in each of the last nine quarters. El Paso has been increasing both its natural gas and oil assets which should help profits whenever the price of oil goes up. Investors like what they see in El Paso and the stock price has risen by 41.94% over the last 52 weeks. I think that El Paso will continue to outperform. I rate El Paso Corporation as a buy.

Provident Energy Ltd. (PVX) Provident has a market cap of $2.23 billion with a negative price to earnings ratio. The stock has traded in a 52 week range between $6.87 and $9.48. The stock is currently trading at around $8. The company reported second quarter revenues of $416.38 million compared to revenues of $366 million in the second quarter of 2010. Second quarter net income was $40.21 million compared to net income of $-40.94 million in the second quarter of 2010.

Provident is a Canadian company that produces stores and transports liquid natural gas. The company has no direct competitors.

Provident was formerly a Canadian Income trust. On January 1, 2011, the company converted into a corporation. The company began making monthly dividend payments in 2002 and has continued to make them since the conversion. The company had net income of $-335 million in 2010 and -$85 million in 2009. In spite of these losses the stock has performed well and is up by 16.86% over the last 52 weeks. Over the last three years, Provident has provided a 34% annual rate of return. Providence increased year over year second quarter net income from $-40.94 million in 2010 to $40.21 million in 2011. I like the fact that Providence increased its year over year quarterly income. I am also impressed with the company’s annual rate of return. I rate Provident Energy Ltd. as a buy.

Halliburton Company (NYSE:HAL) Halliburton has a market cap of $29.52 billion with a price to earnings ratio of 12.26. The stock has traded in a 52 week range between $28.86 and $57.77. The current stock price is around $32. On July 18th the company reported second quarter revenues of $5.93 billion, compared to revenues of $4.39 billion in the second quarter of 2010. Second quarter net income was $1.83 billion compared to net income of $1.15 billion in the second quarter of 2010.

One of Halliburton’s competitors is Baker Hughes Incorporated (NYSE:BHI). BHI is currently trading around $48 with a market cap of $20.88 billion and a price to earnings ratio of 15.89. BHI pays a dividend which yields 1.2% versus Halliburton whose dividend yields 1%.

Halliburton is the second largest oil service company in the world. The company has made a profit in each of the last six years and increased net income by 59% in 2010. The stock has been a mediocre performer and is down by 2.78% over the last 52 weeks. The stock has gained 10% over the last three years. The company has beaten earnings estimates in each of the last three quarters and is projecting 35% revenue growth for 2011. Over the last two months, the stock price has dropped by 68%. Even though oil prices are off of their highs this is a considerable hit for a profitable well established company. I think the drop in the stock price makes Halliburton an attractive buy. I rate Halliburton as a buy.

Exxon Mobil Corporation (NYSE:XOM) Exxon has a market cap of $359.21 billion and a price to earnings ratio of 9.74. The stock has traded in a 52 week range between $61.27 and $88.23. The stock currently trades around $74. On July 28th the company reported second quarter revenues of $125 billion, compared to revenues of $82.56 billion in the second quarter of 2010. Net second quarter net income was $10.7 billion compared to net income of $7.56 billion in the second quarter of 2010.

One of Exxon’s competitors is the Chevron Corporation (NYSE:CVX). CVX is currently trading around $94 with a market cap of $189.06 billion and a price to earnings ratio of 8.24. CVX pays a dividend which yields 3.3% versus Exxon whose dividend yields 2.6%.

Exxon is the largest energy company in the world. In 2010, the company reported net income of $30.5 billion which was a 58% increase over the $19.3 billion in net income reported in 2009. In additional to being a highly profitable company Exxon has been an excellent dividend paying company. The company has paid quarterly dividends for more than 40 years. Exxon has increased its dividend in each of the last five years by a total of 46.8%. The news for Exxon gets even better because the stock price has increased by 17.02% over the last 52 weeks. Exxon is a highly admired company that offers investors growing dividend income and capital appreciation. I believe Exxon would be an excellent fit in any value investor’s portfolio. I rate Exxon Mobil Corporation as a buy.

Source: 5 Must-Own Energy Stocks For 2012