1 Energy Stock Worth Your Attention and 2 That Underwhelm

Adam Hejl Thu, May 14, 2026 at 2:04 AM EDT 3 min read **

• XOM
• ^GSPC
• PTEN
• HAL
• CL=F

Energy businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. They are also bound to benefit from a friendlier regulatory environment with "American energy dominance" stance from the Trump administration, and this excitement has led to a six-month gain of 31.6% for the sector - higher than the S&P 500’s 7.1% return.

• More from Yahoo Scout What makes Halliburton's unit economics concerning?

What are ExxonMobil's main operational challenges?

Why does Patterson-UTI stand out among energy stocks?

How has Trump administration affected energy sector performance?

Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. On that note, here is one energy stock boasting a durable advantage and two we’re swiping left on.

Two Energy Stocks to Sell:

ExxonMobil (XOM)

Market Cap: $599.2 billion

One of the successor companies to John D. Rockefeller's Standard Oil monopoly that was broken up in 1911, ExxonMobil (NYSE:XOM) explores for and produces crude oil and natural gas, refines and sells petroleum products, and manufactures petrochemicals.

Why Do We Think Twice About XOM?**

Gross margin of 44.1% reflects its high production costs and unfavorable asset base

• EBITDA margin was unchanged over the last five years, suggesting it failed to gain leverage on its fixed costs

ExxonMobil is trading at $144.25 per share, or 12x forward P/E. Dive into our free research report to see why there are better opportunities than XOM.

Halliburton (HAL)

Market Cap: $33.27 billion

Behind nearly every oil and gas well drilled worldwide, Halliburton (NYSE:HAL) provides drilling, completion, and production services that help oil and gas companies extract hydrocarbons from underground reservoirs.

Why Are We Cautious About HAL?

• Costly operations and weak unit economics result in an inferior gross margin of 16.8% that must be offset through higher production volumes

At $39.88 per share, Halliburton trades at 16.3x forward P/E. Check out our free in-depth research report to learn more about why HAL doesn’t pass our bar.

One Energy Stock to Watch:

Patterson-UTI (PTEN)

Market Cap: $4.34 billion

Operating 135 Tier-1 super-spec rigs that can handle the industry's most demanding drilling projects, Patterson-UTI (NASDAQ:PTEN) provides contract drilling rigs, hydraulic fracturing, and drill bits to oil and gas operators.

Why Does PTEN Stand Out?

• Market share has increased this cycle as its 12.5% annual revenue growth over the last ten years was exceptional

• Economies of scale give it more fixed cost leverage than its smaller competitors

• EBITDA margin improvement of 3.4 percentage points over the last five years demonstrates its ability to scale efficiently

** Story Continues Patterson-UTI’s stock price of $11.60 implies a valuation ratio of 6.1x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

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