You don’t have to be a Pennsylvania farmer (or a Texas rancher) to get in on the shale boom. Plenty of publicly traded stocks let you do just that. But before investing, be aware of the perils: the political risk created by the controversy over fracking, the chance that production estimates may be overstated (something that the Securities and Exchange Commission is reportedly looking into), and the possibility that natural gas prices will stay at current low levels.
SEE ALSO: Cash In on the Natural Gas Shale Boom
Still interested? Start with Chesapeake Energy (symbol CHK, $30), the 800-pound gorilla of shale (share prices are as of September 9). Its massive network of land brokers has amassed huge leaseholds in the Marcellus, Haynesville, Barnett, Eagle Ford and Utica formations. The Utica Shale rock layer is promising because, in addition to ordinary natural gas, it has oil and natural gas liquids, a more energy-efficient variant of natural gas that commands a higher price.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Ultra Petroleum (UPL, $31) has sizable assets in Wyoming’s Pinedale field and in the Marcellus region. The buzz is that Ultra could be next in a spate of gas companies to be taken over. National Fuel Gas (NFG, $58) is also a big player in the Marcellus region, and additional capacity in its pipeline and gas-storage businesses will boost revenues starting next year.
Service firms provide the picks and shovels for the gas gold rush. Standard & Poor’s recommends Schlumberger (SLB, $72), whose HiWay fracking system aims to improve production and efficiency, and Halliburton (HAL, $40), whose CleanSuite technology seeks to ameliorate fracking’s environmental impact by, for instance, reducing the need for fresh water.
Income seekers can buy master limited partnerships. EV Energy Partners (EVEP, $74) buys and operates oil-and-gas properties. Its shares, which yield 4.1%, do not reflect the potential windfall of its Utica acreage, say bullish analysts at Raymond James & Associates. Williams Partners (WPZ, $53), with a 5.3% yield, focuses on gas transportation and processing.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Top Tech Gifts to Grab at Walmart Before ChristmasBig savings on Apple, Bose, HP, Vizio and more while there's still time to shop.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
-
If You'd Put $1,000 Into Oracle Stock 20 Years Ago, Here's What You'd Have TodayORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
If You'd Put $1,000 Into Sherwin-Williams Stock 20 Years Ago, Here's What You'd Have TodaySherwin-Williams stock has clobbered the broader market by a wide margin for a long time.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages — until it wasn't.
-
If You'd Put $1,000 Into Berkshire Hathaway Stock 20 Years Ago, Here's What You'd Have TodayBerkshire Hathaway is a long-time market beater, but the easy money in BRK.B has already been made.
