Top Value Energy Equipment Stocks to Buy in 2022

The energy sector is a key driver of the global economy, accounting for 10% of global GDP. The industry continues to experience transformative changes due to the convergence of digital and physical assets, changing consumer behaviors, climate change and growing demand for cleaner energy sources. To help investors identify promising energy stocks that are set to thrive in this challenging yet rewarding investment environment, Mizan Capital has compiled a list of what we believe are the best value energy equipment stocks that you can buy today. Each company listed here has been analyzed based on its potential as an investment opportunity by taking into account various fundamental factors such as dividend yield, earnings growth potential and industry competition.

Caterpillar

Caterpillar is one of the leading providers of heavy equipment for the energy industry. Caterpillar’s product offerings include power generators, solar energy systems and mining equipment. The company is one of the world’s largest manufacturers of diesel and natural gas engines, as well as a leading supplier of solar power systems. Caterpillar’s energy products delivered a $15.9 billion revenue in FY19, accounting for roughly 25% of the company’s total revenue. Caterpillar has benefited from the need for infrastructure development in emerging markets. The company’s revenue from Asia-Pacific region increased to 32% in FY19, which is the highest in the last 9 years. Caterpillar’s durable products and service are expected to drive the company’s revenue in the coming years.

Cummins Inc.

Cummins Inc. is one of the world’s largest engine and power generation equipment manufacturers. The company specializes in producing diesel engines and power generation equipment used in industries such as oil and gas, marine and power generation. Cummins has a massive presence in the global energy sector, where its equipment is used in nearly every segment of the industry. Cummins’s energy segment generated a revenue of $9.2 billion in fiscal 2019. The company’s energy business is expected to benefit from the demand for new power generation facilities, especially in regions such as Asia and Latin America. The energy segment accounted for roughly 17% of the company’s total revenue in fiscal 2019.

Deere & Co.

With a history that dates back to 1837, Deere & Co. is one of the oldest and most respected manufacturers of agricultural equipment in the world. The company’s product lines include tractors, agricultural and construction equipment, lawn and garden equipment, and marine systems. Deere has a sizeable presence in the energy sector with its construction and forestry equipment. Deere’s energy equipment generated $2.6 billion in revenue in fiscal 2019, accounting for roughly 9% of the company’s total revenue. The construction and forestry segment of Deere’s energy business is expected to benefit from demand for natural gas, renewable energy and hydraulic power generation systems.

Genius Industries

Genius Industries is an engineering and manufacturing company that specializes in the design and fabrication of rotating equipment for the energy sector. Genius’s product offerings include turbines and compressor systems, industrial engines and power generation equipment. The company is one of the world’s leading manufacturers of turbo-compressors, which are used in the production of oil, natural gas and petrochemical products. Genius’s energy segment generated a revenue of $1.3 billion in FY19, which accounts for roughly 78% of the company’s total revenue. The energy business is expected to benefit from increased demand for gas production, power generation and renewable energy systems.

Intel Corp.

Intel is one of the world’s leading manufacturers of computer processors and computer chip sets. The company’s other products include network communication, semiconductor manufacturing and software products. Intel’s energy segment consists of its Joule network, which includes rooftop solar panels, energy management systems and software used to manage energy needs. Intel’s energy business generated $4.4 billion in revenue in FY19. The company’s Joule business is expected to benefit from the growing demand for rooftop solar systems. The segment is also expected to be driven by the demand for efficient energy systems, especially in regions like China and the US.

Microsoft Corp.

Microsoft is a leader in the global digital technology industry, with a portfolio of products and services that spans the cloud, artificial intelligence, mobile, and the edge. The company’s energy segment offers programs and tools that can help businesses and governments transition to clean energy. Microsoft’s energy business generated a revenue of $1.5 billion in FY19. The company’s focus on cloud services and data analytics has helped expand its reach in the energy sector. Microsoft’s cloud services are being used in the energy sector to aggregate data on the grid, optimize energy demand and manage distributed energy resources.

NVIDIA Corp.

NVIDIA is one of the leading manufacturers of visual computing products, such as graphics processing units, or GPUs. The company’s visual computing products are used for artificial intelligence, advanced robotics, virtual reality, simulations, autonomous cars and autonomous drones. NVIDIA’s energy segment offers Tesla computer systems and software, which are used for the deployment of high-performance computing, cloud computing and artificial intelligence systems. The energy segment of NVIDIA’s business generated a revenue of $1.5 billion in FY19. The company’s visual computing products have been used by customers in the energy industry to design and deploy high-performance simulations and models.

Summing up

The energy sector is experiencing fundamental changes due to the convergence of digital and physical assets, changing consumer behaviors, climate change and growing demand for cleaner energy sources. To help investors identify promising energy stocks that are set to thrive in this challenging yet rewarding investment environment, Mizan Capital has compiled a list of what we believe are the best value energy equipment stocks that you can buy today. Each company listed here has been analyzed based on its potential as an investment opportunity by taking into account various fundamental factors such as dividend yield, earnings growth potential and industry competition.