'Trend higher': 2 ASX 200 energy shares to buy while uncertainty reigns

During troubled times it's logical to back businesses that sell essentials. Experts name a pair that have excellent prospects.

| More on:
Two young African mine workers wearing protective wear are discussing coal quality while on site at a coal mine.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The world is an uncertain place at the moment.

For investors, during times like these, it's not the worst idea to fall back on companies that produce the essentials.

And, aside from water, nothing is much more basic than energy.

The sector is especially in the spotlight because of the region where the current geopolitical instability is.

Here are two energy shares from the S&P/ASX 200 Index (ASX: XJO) that experts are recommending as buys right now:

Has this stock just woken from its slumber?

Whitehaven Coal Ltd (ASX: WHC) is paying out a stunning 9.6% dividend yield, so one could be forgiven for thinking it's reached the top of its cycle.

But the company continues to impress, according to Fairmont Equities boss Michael Gable.

Whitehaven has traditionally earned its living from thermal coal, but he pointed out that it recently diversified into coal that helps produce steel.

"Whitehaven recently announced it had acquired two metallurgical coal mines in Queensland from the BHP Mitsubishi Alliance (BMA)," Gable told The Bull.

"We believe the acquisition is a positive move for Whitehaven." 

Although the share price is down 14.5% over the past 12 months, Gable is encouraged by how it has crept up more than 19.3% since a 6 October trough. 

"We expect Whitehaven to trend higher from here."

These energy shares can't stay cheap forever

Considering the disruptions to global energy supply since the Russian invasion of Ukraine in February last year, investors could consider the sideways movement in the Santos Ltd (ASX: STO) share price somewhat disappointing.

Baker Young analyst Toby Grimm agrees, but reckons it can't remain undervalued for too much longer.

"Despite surging global crude oil prices and excellent operational performance at the company's key LNG projects in Papua New Guinea and Darwin, Santos shares recently remained more than 30% below our valuation," he said.

"The potential regulatory approval of its Barossa field development offers a catalyst in the short term."

Grimm is not alone with this sentiment, with CMC Markets currently showing 14 out of 16 analysts rating Santos shares as a buy.

Santos currently offers an unfranked dividend yield of 4.6%.

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Energy Shares

A uranium plant worker in full protective clothing squats near a radioactive warning sign at the site of a uranium processing plant.
Energy Shares

An Australian energy stock poised for major growth in 2026

An Australian uranium producer could benefit from rising nuclear demand and tighter global supply.

Read more »

Female oil worker in front of a pumpjack.
Energy Shares

Up 34% in 12 months, here's why Amplitude Energy shares can keep rising

Are these energy shares a buy, hold or sell according to Bell Potter?

Read more »

A coal miner wearing a red hard hat holds a piece of coal up and gives the thumbs up sign in his other hand
Energy Shares

Which ASX 200 coal share is this fundie buying more of?

And should you buy it, too?

Read more »

A worker with a clipboard stands in front of a nuclear energy facility.
Energy Shares

Best 3 ASX 200 uranium shares of 2025

Uranium shares flourished as nations adopted policies for locally-produced nuclear power.

Read more »

A man sees some good news on his phone and gives a little cheer.
Energy Shares

Should you buy Paladin Energy shares after its strong update?

Bell Potter has upgraded its valuation for this high-flying uranium stock.

Read more »

Oil worker giving a thumbs up in an oil field.
Energy Shares

Santos shares increase on strong quarterly cash flows

Let's take a look.

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

What's Bell Potter's view on Beach Energy shares after its 9% production dip?

How does the broker view this stock after yesterday's report?

Read more »

A man wearing a suit holds his arms aloft, attached to a large lithium battery with green charging symbols on it.
Energy Shares

Up 10% in a month. Is this ASX lithium stock finally back on track?

Vulcan shares rise after successful production testing at its flagship Lionheart lithium project.

Read more »