4 Oil & Gas Stocks Stifel Is Constructive On as Energy Prices Stay High

Four oil and gas stocks have been identified as having potential for continued shareholder returns by investment firm Stifel, despite the current high prices of energy. These companies have demonstrated prudent capital management while reaping benefits from a growing demand for energy and concerns over energy security.

Diamondback Energy, a prominent player in the Permian Basin, stands out as the most cost-effective operator within its peer group, thanks to its extensive Midland position. The company's economics are bolstered by its ownership of Viper Royalties, and its underlevered balance sheet enables it to return capital efficiently while continuing to grow its production.

Diamondback Energy recently reported impressive second-quarter 2026 results, surpassing analyst expectations for both revenue and adjusted earnings per share. However, reactions have been mixed, with some analysts boosting their price targets and others lowering them due to valuation concerns.

Expand Energy, the largest natural gas producer in the US, is also highlighted by Stifel as a particularly attractive option. The company boasts an 11% free cash flow yield and a below-average price-to-estimated EBITDAX ratio, making it the most inexpensive gas-weighted equity in Stifel's portfolio. Its vast scale provides it with substantial flexibility to capitalize on prolonged demand trends, including the growth of LNG projects along the Gulf Coast and the increasing demand for power in data centers.

The recent acquisition of Twin Peaks further enhances the company's market position by improving margins through strategic marketing efforts.

Permian Resources, a Delaware Basin pure-play, is another stock identified by Stifel as having strong growth potential. Trading at a low valuation multiple of 3.9x estimated EBITDAX, the company is well-positioned to generate over 50% of its enterprise value in free cash flow by 2030. Permian Resources' consistent track record of effective field management and its strategic acquisitions have positioned it to benefit from low-cost inventory and superior field execution.

The company recently met and exceeded Wall Street's earnings estimates for the second quarter, and its free cash flow surged to a record $751 million, prompting Keybanc to raise its price target on the stock.

Lastly, Sable Offshore, which operates the Santa Ynez Unit Offshore California, is another oil and gas stock garnering attention from Stifel. As production ramps up to over 50,000 barrels of oil equivalent per day gross by 2028, Sable Offshore is expected to generate an attractive free cash flow profile from its long-lived assets, which also come with the advantage of being exposed to Brent price movements.