There are plenty of options for investors to choose from in the energy sector. But which ASX 200 energy shares should you buy?
Listed below are a couple of energy shares that have been named on the best ideas list of Morgans for the month of February.
Here's why they could be top options for investors:
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Karoon Energy Ltd (ASX: KAR)
The first ASX 200 energy share that has been named as a buy is Karoon Energy. Morgans likes the company due to its strong balance sheet and bold production growth plans. It explained:
Unique as a reasonable scale pure conventional oil producer, benefitting directly from rising oil prices. Karoon has significant net cash and is fully funded through a doubling of production over the next 12 months. While there is also potential catalysts just around the corner with Karoon flagging at its recent result that it planned to shortly update the market with more detail on its growth plans, Bauna's outlook, and its ESG approach.
Morgans has an add rating and $3.70 price target on Karoon Energy's shares.
Santos Ltd (ASX: STO)
Another ASX 200 energy share that Morgans thinks investors should be considering is Santos. It sees the energy producer as a great option due to the strength of its growth profile and its diversified earnings base. It commented:
The resilience of STO's growth profile and diversified earnings base see it well placed to outperform against the backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for STO, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa's development. PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio.
Morgans has an add rating and $8.75 price target on Santos' shares. It also expects an attractive 5.8% dividend yield in FY 2023.
