Energy ETFs (exchange-traded funds) invest in the stocks of U.S. or non-U.S. companies that conduct business in the energy sector. Importantly, they offer a cost-effective means of gaining exposure to this cyclical industry. Today, we have leveraged the TipRanks ETF Screener to scan for two energy ETFs with more than 20% upside potential projected by analysts: iShares U.S. Energy ETF (IYE) and SPDR S&P Oil & Gas Equipment & Services ETF (XES).
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Let’s take a closer look at what Wall Street thinks about these two ETFs.
iShares U.S. Energy ETF (IYE)
The IYE ETF seeks to track the performance of the Russell 1000 Energy RIC 22.5/45 Capped Index, which is composed of U.S. equities in the energy sector. It provides exposure to firms, including E&P firms, oil service stocks, midstream/pipeline companies, as well as downstream refiners and marketers of fuel. IYE has $1.45 billion in assets under management (AUM), with its top 10 holdings contributing 71.99% of the portfolio.
On TipRanks, the IYE ETF has a Moderate Buy consensus rating. Of the 41 stocks held, 31 have Buys, and 10 have a Hold rating. The analysts’ average price target on the IYE ETF of $58.17 implies a 22.8% upside potential from the current levels. The ETF has gained 10.1% in the past six months.
SPDR S&P Oil & Gas Equipment & Services ETF (XES)
The XES ETF seeks to track the performance of the S&P Oil and Gas Equipment and Services Select Industry Index. It provides exposure to oil and gas drilling, and oil & gas equipment and services companies. XES has $304.4 million in AUM, with its top 10 holdings contributing 43.72% of the portfolio.
On TipRanks, the XES ETF has a Moderate Buy consensus rating. Of the 36 stocks held, 26 have Buys, eight have a Hold, and two have a Sell rating. The analysts’ average price target of $117.90 implies a 36.88% upside potential from the current levels. The ETF has gained 5.6% in the past six months.
Concluding Thoughts
Energy ETFs can be valuable additions to an investment portfolio, offering diversification and the potential to generate income. Given the solid upside potential expected by analysts, IYE and XES ETFs might seem worth considering.
