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We like energy stocks for a few reasons. They provide protection against inflation and a decline in the value of the dollar. Everybody is a consumer of energy and investors hedge their exposure by initiating positions in energy companies. If the price of oil climbs, they pay more at the pump, but they also have capital gains, which offsets the effects of high oil prices. Finally, we like energy stocks because the thirst for energy keeps growing globally, especially in the fast-growing emerging markets.

We screened for the top 10 most profitable energy companies based in USA. All the companies in this list have a minimum current operating margin of 20% and EPS growth rate of 10% in the last 5 years.

Alliance Holdings GP, L.P. (AHGP) is a limited partnership formed to own and control Alliance Resource Management GP, LLC, the managing general partner of Alliance Resource Partners, L.P. Company operates with an operating margin of 22%. The recent quarterly dividend is $0.56.

Alliance Resource Partners (ARLP) is a diversified producer and marketer of coal to major United States utilities and industrial users. Company operates with an operating margin of 23%. Current P/E ratio of 8.81 is among the lowest in energy industry. The recent quarterly dividend is $0.89.

Diamond Offshore Drilling, Inc. (DO) is a deepwater drilling contractor, which provides drilling services to the oil and gas industry. Company operates with an operating margin of 40%, which is among the highest in energy industry. Current P/E ratio of 8.05 is among the lowest in energy industry. The most recent quarterly dividend is $0.50.

Ensco plc (ESV) is a multinational oil and gas services company headquartered in London. It is the world's second-largest offshore oil and gas well-drilling company, and has 49 offshore jack-ups, seven drillships and 20 semi-submersible drilling rigs servicing domestic, international, and scientific drilling markets. Company operates with an operating margin of 30%. The recent quarterly dividend is $0.35. Greenlight Capital had a $200+ million long-term position in the stock at the end of June.

Energen Corporation (EGN) is a diversified energy company that operates two divisions; an oil and gas exploration company and a natural gas utility company. Company operates with an operating margin of 32%. The recent quarterly dividend is $0.14.

Helmerich & Payne, Inc. (HP) is the successor to a business originally organized in 1920. H&P is primarily engaged in contract drilling of oil and gas wells for exploration and production companies. Company operates with an operating margin of 27%. The recent quarterly dividend is $0.07.

NuStar GP Holdings, LLC (NS) owns general partner and limited partner interests in NuStar Energy L.P., one of the nation's largest asphalt refiners and marketers and operators of petroleum product terminals and petroleum liquids pipelines. Company has a stable operating margin of 95%, which is the highest in energy industry. The recent quarterly dividend is $0.50.

Peabody Energy Corporation (BTU), previously Peabody Coal Company, is the largest private-sector coal company in the world. Company operates with an operating margin of 20%. The recent quarterly dividend is $0.08.

RPC, Inc. (RES) is a holding company traded on the New York Stock Exchange under the ticker symbol RES. The company provides oilfield services and equipment to independent and major oilfield companies in exploration, production and development of oil and gas properties, domestically and in selected international markets. Company operates with an operating margin of 27%. The recent quarterly dividend is $0.07.

Walter Energy, Inc. (WLT) is the world’s leading publicly traded “pure play” metallurgical coal producer for the global steel industry. The company also produces steam coal and industrial coal, anthracite, metallurgical coke, and coal bed methane gas. Company operates with an operating margin of 31%. Current P/E ratio of 8.11 is among the lowest in energy industry. The recent quarterly dividend is $0.12. Billionaire John Paulson had more than $100 million in WLT at the end of June.

Source: Top 10 Most Profitable Energy Stocks