“Profits are forecast to bounce back by double digits in 2014 even as revenues are basically flat, though forecasts could change quickly if political turmoil sends oil prices much higher. The Energy sector appears relatively attractive in terms of valuation, trading at a discount to the S&P500 on most multiples, but long term we think the shale oil & gas revolution means larger supplies resulting in lower energy prices–great for consumers but a mixed bag for Energy firms,” said AltaVista in the note.
The research firm estimates 2015 P/E ratio at 14.4 with a price-to-cash flow ratio of 6.9 and a dividend yield of 2.2%.
Energy Select Sector SPDR
ETF Trends editorial team contributed to this post.