NEW YORK (TheStreet) -- The energy sector declined through the first quarter of 2015 and then pared some of its losses in the second quarter. Through the first half, the S&P energy index declined by 6%, compared to  a meager 0.2% gain for the S&P 500 as a whole.

Despite underperforming the market as a whole, some energy stocks have done quite well so far in 2015. Here are the 10 best. 

TheStreet paired the 10 best performing energy sector stocks with TheStreet Ratings to determine whether they really are poor investments going forward.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which stocks were among the best energy performers in the S&P 500 for the quarter. And when you're done with that be sure to find out which health care company had the best performance in the S&P 500 for the first quarter.

 

COG ChartCOG data by YCharts
10. Cabot Oil & Gas Corporation (COG - Get Report)

Market Cap: $13 billion
Year-to-date return: 6.5%
TheStreet Ratings: Hold, C

Cabot Oil & Gas Corporation, an independent oil and gas company, develops, exploits, explores for, produces, and markets natural gas, oil, and natural gas liquids in the United States.

"We rate CABOT OIL & GAS CORP (COG) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has slightly increased to $267.38 million or 4.70% when compared to the same quarter last year. In addition, CABOT OIL & GAS CORP has also vastly surpassed the industry average cash flow growth rate of -53.17%.
  • The debt-to-equity ratio is somewhat low, currently at 0.86, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.49 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The gross profit margin for CABOT OIL & GAS CORP is rather high; currently it is at 62.93%. Regardless of COG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, COG's net profit margin of 8.66% compares favorably to the industry average.
  • The share price of CABOT OIL & GAS CORP has not done very well: it is down 6.97% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, CABOT OIL & GAS CORP's return on equity significantly trails that of both the industry average and the S&P 500.

 

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9. EQT Corporation (EQT - Get Report)

Market Cap: $12.4 billion
Year-to-date return: 7.5%
TheStreet Ratings: Buy, B

EQT Corporation, together with its subsidiaries, operates as a natural gas company in the United States. It operates in two segments, EQT Production and EQT Midstream.

"We rate EQT CORP (EQT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 38.7%. Since the same quarter one year prior, revenues slightly increased by 7.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.68, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, EQT has a quick ratio of 1.91, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for EQT CORP is currently very high, coming in at 71.89%. Regardless of EQT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EQT's net profit margin of 24.46% significantly outperformed against the industry.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 9.8% when compared to the same quarter one year ago, dropping from $192.19 million to $173.43 million.
  • EQT CORP's earnings per share declined by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, EQT CORP increased its bottom line by earning $2.53 versus $1.97 in the prior year. For the next year, the market is expecting a contraction of 40.3% in earnings ($1.51 versus $2.53).

 

HAL ChartHAL data by YCharts
8. Halliburton Company (HAL - Get Report)

Market Cap: $36.7 billion
Year-to-date return: 9.5%
TheStreet Ratings: Hold, C+

Halliburton Company provides a range of services and products to the upstream oil and natural gas industry worldwide. The company operates through two segments, Completion and Production, and Drilling and Evaluation.

"We rate HALLIBURTON CO (HAL) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HAL has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • HAL, with its decline in revenue, slightly underperformed the industry average of 1.9%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $812.00 million or 14.88% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, HALLIBURTON CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.

 

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7. Baker Hughes Incorporated (BHI)

Market Cap: $26.8 billion
Year-to-date return: 10%
TheStreet Ratings: Buy, B-

Baker Hughes Incorporated supplies oilfield services, products, technology, and systems to the oil and natural gas industry worldwide.

"We rate BAKER HUGHES INC (BHI) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BHI's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BHI has a quick ratio of 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
  • BHI, with its decline in revenue, underperformed when compared the industry average of 1.9%. Since the same quarter one year prior, revenues fell by 19.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • BAKER HUGHES INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BAKER HUGHES INC increased its bottom line by earning $3.92 versus $2.47 in the prior year. For the next year, the market is expecting a contraction of 100.5% in earnings (-$0.02 versus $3.92).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 279.6% when compared to the same quarter one year ago, falling from $328.00 million to -$589.00 million.
  • The share price of BAKER HUGHES INC has not done very well: it is down 14.82% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

 

PSX ChartPSX data by YCharts
6. Phillips 66 (PSX - Get Report)

Market Cap: $43.7 billion
Year-to-date return: 12.4%
TheStreet Ratings: Buy, A

Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S).

"We rate PHILLIPS 66 (PSX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, notable return on equity and impressive record of earnings per share growth. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.13, which illustrates the ability to avoid short-term cash problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PHILLIPS 66 has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • PHILLIPS 66 has improved earnings per share by 21.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, PHILLIPS 66 increased its bottom line by earning $7.12 versus $5.91 in the prior year. For the next year, the market is expecting a contraction of 8.1% in earnings ($6.55 versus $7.12).
  • PSX, with its decline in revenue, slightly underperformed the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 47.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.

  

TSO ChartTSO data by YCharts
5. Tesoro Corporation (TSO)

Market Cap: $10.6 billion
Year-to-date return: 13.5%
TheStreet Ratings: Buy, A-

Tesoro Corporation, through its subsidiaries, engages in petroleum refining and marketing activities in the United States. It operates in three segments: Refining, Tesoro Logistics LP (TLLP), and Retail.

"We rate TESORO CORP (TSO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, reasonable valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 94.91% and other important driving factors, this stock has surged by 46.73% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TESORO CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TESORO CORP increased its bottom line by earning $6.69 versus $2.83 in the prior year. This year, the market expects an improvement in earnings ($7.43 versus $6.69).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 85.9% when compared to the same quarter one year prior, rising from $78.00 million to $145.00 million.
  • Net operating cash flow has slightly increased to -$148.00 million or 1.33% when compared to the same quarter last year. In addition, TESORO CORP has also vastly surpassed the industry average cash flow growth rate of -53.17%.

 

MPC ChartMPC data by YCharts
4. Marathon Petroleum Corporation (MPC - Get Report)
Market Cap: $28.4 billion
Year-to-date return: 15.9%
TheStreet Ratings: Buy, A

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, marketing, retailing, and transporting petroleum products primarily in the United States. It operates through three segments: Refining & Marketing, Speedway, and Pipeline Transportation.

"We rate MARATHON PETROLEUM CORP (MPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 383.58% and other important driving factors, this stock has surged by 27.07% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MPC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • MARATHON PETROLEUM CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MARATHON PETROLEUM CORP increased its bottom line by earning $4.42 versus $3.31 in the prior year. This year, the market expects an improvement in earnings ($5.49 versus $4.42).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 347.7% when compared to the same quarter one year prior, rising from $199.00 million to $891.00 million.
  • Net operating cash flow has significantly increased by 55.35% to $1,190.00 million when compared to the same quarter last year. In addition, MARATHON PETROLEUM CORP has also vastly surpassed the industry average cash flow growth rate of -53.17%.

VLO ChartVLO data by YCharts
3. Valero Energy Corporation (VLO - Get Report)

Market Cap: $31.8 billion
Year-to-date return: 26.5%
TheStreet Ratings: Buy, A-

Valero Energy Corporation operates as an independent petroleum refining and marketing company in the United States, Canada, the Caribbean, the United Kingdom, and Ireland. It operates through two segments, Refining and Ethanol.

"We rate VALERO ENERGY CORP (VLO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 16.4% when compared to the same quarter one year prior, going from $828.00 million to $964.00 million.
  • The current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 487.29% to $1,433.00 million when compared to the same quarter last year. In addition, VALERO ENERGY CORP has also vastly surpassed the industry average cash flow growth rate of -53.17%.

 

WMB ChartWMB data by YCharts
2. Williams Companies, Inc. (WMB - Get Report)

Market Cap: $43 billion
Year-to-date return: 27.7%
TheStreet Ratings: Buy, B-

The Williams Companies, Inc. operates as an energy infrastructure company primarily in the United States. The company operates in three segments: Williams Partners, Access Midstream, and Williams NGL & Petchem Services.

"We rate WILLIAMS COS INC (WMB) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 50.00% to $669.00 million when compared to the same quarter last year. In addition, WILLIAMS COS INC has also vastly surpassed the industry average cash flow growth rate of -53.17%.
  • The gross profit margin for WILLIAMS COS INC is rather high; currently it is at 50.52%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.07% trails the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, WILLIAMS COS INC has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
  • Despite the weak revenue results, WMB has significantly outperformed against the industry average of 38.7%. Since the same quarter one year prior, revenues slightly dropped by 1.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • WILLIAMS COS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WILLIAMS COS INC increased its bottom line by earning $2.82 versus $0.64 in the prior year. For the next year, the market is expecting a contraction of 66.3% in earnings ($0.95 versus $2.82).

 

NFX ChartNFX data by YCharts
1. Newfield Exploration Company (NFX)

Market Cap: $5.8 billion
Year-to-date return: 33.2%
TheStreet Ratings: Buy, C+

 

Newfield Exploration Company, an independent energy company, engages in the exploration, development, and production of crude oil, natural gas, and natural gas liquids.

"We rate NEWFIELD EXPLORATION CO (NFX) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.74, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.32, which illustrates the ability to avoid short-term cash problems.
  • NFX, with its decline in revenue, slightly underperformed the industry average of 38.7%. Since the same quarter one year prior, revenues fell by 38.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • NEWFIELD EXPLORATION CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEWFIELD EXPLORATION CO increased its bottom line by earning $4.71 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 84.7% in earnings ($0.72 versus $4.71).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 269.0% when compared to the same quarter one year ago, falling from $284.00 million to -$480.00 million.
  • The share price of NEWFIELD EXPLORATION CO has not done very well: it is down 13.90% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.