3 Innovative Energy Stocks Charging Ahead
The energy sector is on the cusp of transformative growth in 2025, fueled by technological breakthroughs, the rapid adoption of renewable energy, and the increasing demand for sustainable solutions. In this article, we’ll discuss three fundamentally sound energy stocks: ChampionX Corporation (CHX), Subsea 7 S.A. (SUBCY), and DNOW Inc. (DNOW), which are driving innovation in this space.
The transition toward low-emission transportation and cleantech manufacturing in the United States has gained significant traction thanks to supportive policies and growing investor interest. This shift creates a fertile ground for innovative energy companies to thrive as they address the demand for greener, more efficient solutions.
One key driver in this transition is artificial intelligence (AI), which reshapes energy systems by enabling smarter energy generation, storage, and trading strategies. With the global AI in the energy market projected to grow nearly sixfold to $58.66 billion by 2030, the potential for innovation is immense.
Concurrently, clean energy technologies are poised to reduce emissions, especially as the world aims to meet ambitious net-zero goals by 2050. While existing solutions will help, real breakthroughs will rely on cutting-edge technologies still in development. With the clean energy market expected to exceed $2 trillion in the next decade, the sector is ripe for growth.
Moreover, the Energy as a Service market is poised to surge from $105.91 billion in 2025 to $190.69 billion by 2030, exhibiting a CAGR of 12.5%. With rising demand for innovative energy solutions, companies in this space are not only contributing to a greener future but also unlocking significant growth opportunities for investors.
Let’s look at the fundamentals of the above-mentioned Energy – Services picks, beginning with the third choice:
Stock #3: DNOW Inc. (DNOW)
DNOW is a global supplier of downstream energy and industrial products for petroleum refining, chemical processing, LNG terminals, power generation utilities, and customer on-site locations. Its offerings include consumable maintenance, repair, and operating (MRO) supplies, pipe, manual and automated valves, fittings, flanges, gaskets, fasteners, electrical, instrumentation, artificial lift, etc.
On November 26, 2024, DNOW acquired Trojan Rentals, LLC, a leading provider of pump rentals, automation technology, and sales of layflat hose and other associated equipment to support customers’ water sourcing, transfer, recycling, and treatment requirements. This acquisition enhances DNOW’s product portfolio and earnings potential, aligning with its commitment to enhance long-term value for shareholders.
DNOW’s trailing-12-month net income margin of 8.70% is 34.2% higher than the 6.48% industry average. Similarly, its 20.02% trailing-12-month ROCE is 47.5% above the 13.57% industry average. In addition, the stock’s 1.59x trailing-12-month asset turnover ratio compares to the industry average of 0.78x.
In the fiscal third quarter that ended on September 30, 2024, DNOW’s revenue increased 3.1% year-over-year to $606 million. Its EBITDA, excluding other costs, came in at $42 million, while its non-GAAP net income for the quarter amounted to $22 million or $0.21 per share. As of September 30, 2024, the company’s total assets stood at $1.59 billion, up 3.8% compared to $1.53 billion recorded on December 31, 2023.
Analysts expect DNOW’s revenue for the fiscal year 2024, which ended December 31, to increase by 1.5% year-over-year to $2.36 billion, while its EPS is estimated to come in at $0.79. For the fiscal year 2025, its revenue and EPS are expected to grow marginally from the prior year to $2.37 billion and $0.81, respectively.
DNOW shares have surged 35.3% over the past year to close the last trading session at $13.49.
DNOW’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has a B grade for Value and Quality. Among 53 stocks in the Energy – Services industry, it is ranked #8. Click here to see DNOW’s ratings for Growth, Momentum, Stability, and Sentiment.
Stock #2: ChampionX Corporation (CHX)
CHX provides chemistry solutions, artificial lift systems, engineered equipment, and technologies worldwide to oil and gas companies. It operates through four segments: Production Chemical Technologies; Production & Automation Technologies; Drilling Technologies; and Reservoir Chemical Technologies.
On November 15, 2024, CHX declared a quarterly dividend of $0.095 per share on the company’s common stock, payable to its shareholders on January 31, 2025. Its four-year average yield is 0.67%, while its annual dividend of $0.38 translates to a 1.32% yield on the current prices.
CHX’s trailing-12-month levered FCF margin of 14.19% is 104.7% higher than the industry average of 6.93%. Likewise, its 13.07% trailing-12-month ROTC is 86.4% above the industry average of 7.01%. Also, the stock’s trailing-12-month asset turnover ratio of 1.10x compares favorably to the industry average of 0.47x.
For the third quarter that ended on September 30, 2024, CHX’s total revenue stood at $906.53 million, while the company’s Production & Automation Technologies segment reported revenue of $275.70 million, indicating a 7.6% growth from the prior-year period. Its gross profit increased 2% year-over-year to $297.77 million. CHX’s attributable net income amounted to $72.01 million, while its adjusted earnings per share came at par with the year-ago value of $0.44.
Street expects CHX’s EPS for the fiscal year 2024, which ended on December 31, to increase 2.3% year-over-year to $1.83. Its revenue for the same period is expected to come in at $3.68 billion. For the fiscal year 2025, its EPS and revenue are expected to register a year-over-year growth of 15.5% and 4.5%, respectively.
Over the past year, the stock has gained 8.5%, closing the last trading session at $28.87.
It’s no surprise that CHX has an overall rating of B, equating to a Buy in our POWR Ratings system. It has a B grade for Quality and is ranked #6 out of 53 stocks in the same industry.
Beyond what is stated above, we’ve also rated CHX for Growth, Value, Momentum, Stability, and Sentiment. Get all CHX ratings here.
Stock #1: Subsea 7 S.A. (SUBCY)
Headquartered in Luxembourg, SUBCY delivers offshore projects and services for the energy industry globally. It offers subsea field development products and services, like project management, design, and engineering. It also provides engineering, procurement, commissioning, and installation of subsea umbilicals, risers, and flowlines.
On January 9, 2025, SUBCY secured a front-end engineering and design (FEED) contract by Equinor for the Fram Sør development project offshore Norway, with an option for EPCI work. The study, beginning immediately in Norway and the UK, will refine the subsea design ahead of Equinor’s final investment decision.
If the EPCI option is exercised, the company will handle SURF installation, with offshore activities planned for 2026-2028. This early involvement positions SUBCY to optimize solutions and shape project outcomes.
On December 30, 2024, SUBCY was awarded a large contract by Turkish Petroleum Offshore Technology Center AS to provide inspection, repair, and maintenance (IRM) services for the Sakarya field development in the Black Sea, offshore Türkiye. The collaboration aligns well with SUBCY’s operations, allowing it to explore the full potential of the Sakarya gas field and strengthen its long-term presence in Türkiye.
The stock’s trailing-12-month levered FCF margin of 9.01% is 29.9% higher than the industry average of 6.93%. Likewise, its trailing-12-month asset turnover ratio of 0.83x is 75.2% above the industry average of 0.47x.
For the third quarter that ended September 30, 2024, SUBCY’s revenue increased 16.2% year-over-year to $1.83 billion, and its gross profit rose 76.8% from the year-ago value to $226.10 million. The company’s net income and EPS came in at $98 million and $0.31, up 172.2% and 181.8% from the prior year’s quarter, respectively. In addition, its adjusted EBITDA increased 59.7% from the year-ago value to $321 million.
As per the company’s full-year 2024 outlook, SUBCY expects revenue between $6.50 billion and $6.80 billion, and its adjusted EBITDA is expected to range from $1.03 billion to $1.08 billion.
Analysts expect SUBCY’s revenue for the fourth quarter (ended December 2024) to increase 9.8% year-over-year to $1.79 billion. The company’s revenue for the fiscal year 2025 is expected to grow 6.3% year-over-year to $7.16 billion. Moreover, the company topped the consensus revenue estimates in three of the trailing four quarters.
SUBCY’s stock has surged 21.9% over the past year and 9.7% year-to-date to close the last trading session at $17.32.
SUBCY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
SUBCY has an A grade for Growth and a B for Stability and Sentiment. It is ranked #5 among 53 stocks in the Energy – Services industry. To access SUBCY’s other ratings for Value, Momentum, and Quality, click here.
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CHX shares were unchanged in premarket trading Thursday. Year-to-date, CHX has gained 6.55%, versus a 1.14% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta’s profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions. More…