As Trump Pushes for “Energy Dominance,” 3 Core Energy Holdings Stand Out for Patient Investors

The current administration’s determination to pursue a policy of energy dominance while engaging in conflicts that directly affect regions of the world competing with the U.S. for energy is creating opportunities for North American companies.

Two of the key energy industries likely to benefit are liquefied natural gas (LNG) and nuclear energy. That’s why the Global X U.S. Natural Gas ETF (LNGX 0.92%), gas technology company Baker Hughes (BKR 1.15%), and nuclear fuel and services provider Cameco (CCJ +2.40%) are good stocks to consider in the current environment.

1. The Global X U.S. Natural Gas ETF

This ETF provides broad-based exposure to the U.S. natural gas industry, from upstream producers to midstream activities (transportation, processing, and storage) to export. A quick look at the four largest LNG exporters in 2024 shows the importance of Qatar and Russia to global LNG provision. Russia is being frozen out of exporting to the EU (the world’s largest LNG importer) due to the conflict in Ukraine.

Meanwhile, Qatar’s LNG normally ships through the blockaded Strait of Hormuz, and even if the Strait should reopen, QatarEnergy estimates it could take three to five years to repair the damage to its infrastructure fully.

Data source: The International Group of LNG Importers. mtap = metric tonnes per annum.  

As such, the combination of burgeoning demand for power for AI data centers and the opportunity to export LNG globally supports the U.S. natural gas industry. You could try to pick winners in the industry, or avoid stock-specific risk and gain exposure through the 33 holdings currently in this ETF, which include leading U.S. energy companies like Devon Energy, Diamondback Energy, and Cheniere Energy. The expense ratio is a respectable 0.45%, and the ETF currently yields 1.7%.

2. Baker Hughes

Continuing the theme of investing in natural gas, Baker Hughes is a company changing how investors view it. The company used to be seen as an oilfield services company, but it’s now increasingly seen as an industrial energy technology company. While its oilfield services and equipment (OFSE) segment remains a major part of the company, its growth engine is its industrial and energy technology (IET) segment.

Many of the LNG companies in the ETF are already customers of Baker Hughes gas technology equipment (compressors, turbines, and other technology essential to the liquefaction process, in which natural gas is transported and converted to LNG). In addition, the forthcoming acquisition of Chart Industries will only increase its exposure to gas.

The deal is complementary and will add Chart’s static solutions (heat exchangers, small-scale compression, and cryogenic equipment) to Baker Hughes’ rotating equipment. It will also increase the company’s exposure to the industrial gas sector.

3. Cameco

The consequences of the closure of the Strait of Hormuz and the inevitable reconsideration of the risks to the energy supply chain posed by relying on fossil fuels (crude oil and LNG) flowing through it increase the appeal of nuclear energy as a solution to energy provision.

Additionally, demand for nuclear technology is rising as utilities and hyperscalers seek carbon-free energy sources to power AI data centers and support strained electricity grids.

Russia is a major provider of uranium, and Cameco has an opportunity to fill the gap created by utilities no longer buying uranium from the country. In addition, the burgeoning investment by hyperscalers in nuclear reactors under long-term contracts supports long-term demand, as does the growing willingness of governments to permit nuclear projects.

For example, four more countries (Belgium, Brazil, China, and Italy) joined the declaration to triple nuclear power capacity by 2050 at the recent Paris summit. These actions, combined with recent events, have raised the profile of nuclear energy, and Cameco’s uranium nuclear fuels and services expertise means it’s ideally placed to benefit.