1 Energy Stock for Long-Term Investors and 2 Facing Headwinds Jabin Bastian Tue, October 13, 2026 at 6:51 AM EDT 3 min read VAL +1.54% ^GSPC -0.06% AESI -2.69% GPOR +1.41% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Even if they go mostly unnoticed, energy businesses are the backbone of our country, providing the energy we need to power our lives and businesses.But they are at the whim of volatile macroeconomic factors that influence capital spending (like interest rates and commodity prices), and the industry has underperformed the market over the past six months as its 2.4% return lagged the S&P 500 by 11 percentage points.
Only some companies are subject to these dynamics, however, and a handful of high-quality businesses can deliver earnings growth in any environment. On that note, here is one energy stock poised to generate sustainable market-beating returns and two best left ignored.
Operating the world's largest fleet of offshore drilling rigs across six continents, Valaris (NYSE:VAL) provides offshore drilling rigs and crews to oil and gas companies exploring and producing in deep waters and shallow seas.
Sales tumbled by 5% annually over the last ten years, showing market trends are working against it during this cycle
Costly operations and weak unit economics result in an inferior gross margin of 21.5% that must be offset through higher production volumes
Negative free cash flow raises questions about the return timeline for its investments
Valaris is trading at $84.73 per share, or 13.5x forward P/E. Read our free research report to see why you should think twice about including VAL in your portfolio, it's free.
Building the world's first long-haul proppant conveyor system to reduce truck traffic, Atlas Energy Solutions (NYSE:AESI) mines and processes sand used as proppant to prop open fractures in oil and gas wells during hydraulic fracturing.
Why Do We Think AESI Will Underperform?
Costs have risen faster than its revenue over the last five years, causing its EBITDA margin to decline by 38.5 percentage points
Cash-burning history makes us doubt the long-term viability of its business model
Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Atlas Energy Solutions's stock price of $11.90 implies a valuation ratio of 10.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than AESI.
With drilling operations focused on the Utica Shale in eastern Ohio and the SCOOP play in central Oklahoma, Gulfport Energy (NYSE:GPOR) drills for and produces natural gas from underground shale formations.
Annual revenue growth of 10.8% over the last ten years was superb and indicates its market share increased during this cycle
Highly-profitable operating model results in strong unit economics and a stellar gross margin of 70.9%
GPOR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $164.54 per share, Gulfport Energy trades at 6.7x forward P/E. Is now the right time to buy? Find out in our full research report, it's free.
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