Written by Christopher Liew, CFA at The Motley Fool Canada
The stock market is so beset with massive headwinds in 2022 that investors are on edge. Supply chain disruptions, oil prices, interest rate hikes, and geopolitical tensions can trigger declines or even a market correction. However, if you want to pick the top-growing stocks on the planet, the task is easy.
No one can dispute the meteoric rise of oil and gas stocks like Vermilion Energy (TSX:VET)(NYSE:VET) and Suncor Energy (TSX:SU)(NYSE:SU) under the present pricing environment. Nutrien (TSX:NTR)(NYSE:NTR) will continue to rise because of its mission to transform agriculture and feed the world.
Vermilion Energy continues to dazzle investors with its impressive stock performance. The current share price of $29.69 is 242.45% higher from a year ago. Also, the year-to-date gain is 87.56%. Based on market analysts’ forecasts, the upward momentum won’t stop anytime soon. They predict the price to appreciate between 26.54% (average) and 75.14% (high) in 12 months.
The $5.07 billion international energy producer had a great start to 2022. In the three months ended March 31, 2022, petroleum and natural gas sales increased 120% versus the first quarter (Q1) 2021. While net earnings declined 43.21% year over year, free cash flow (FCF) soared 287% to $304.52 million.
According to management, the acquisition of Leucrotta Exploration Inc. will add more than 20 years of FCF-generating, tier-one drilling inventory. The strategic acquisition positions Vermilion to deliver sustainable long-term shareholder returns. Investors also welcomed the reinstatement of the quarterly dividends. The dividend yield is modest (0.40%), but the capital gains can more than compensate.
Suncor Energy saw a chief executive officer resign recently due to safety issues — an accident at its base plant in particular. However, you can’t dismiss the oil bellwether as a profitable investment option. In Q2 2022, the $53.99 billion integrated energy reported a 359.68% increase in earnings to $3.99 billion versus Q2 2021.
The adjusted funds from operations grew 33% year over year to $5.35 billion — the highest jump ever in Suncor’s history. Performance-wise, investors are up 25.94% year to date. Market analysts are bullish on the resurging energy stock. Their 12-month average price target is $55.72, or a 42.58% appreciation from $39.08. If you invest today, the dividend offer is 4.8%.
Management is undertaking safety improvements and a strategic review of Suncor’s retail business. The sale or value enhancement of the latter are the options.
Nutrien aims to drive systematic change and lead the next wave of agricultural evolution by 2030. The $61.37 billion company provides crop inputs and services. Its network of over 2,000 retail locations distributes crop nutrients, crop protection products, seeds, and merchandise products. Besides Canada, Nutrien caters to customers in U.S., South America, and Australia.
Higher commodity prices are tailwinds for Nutrien. In Q2 2022, net earnings reached a record US$3.6 billion. Meanwhile, cash from operations in the first half of the year topped US$2.5 billion.
In 3.01 years, Nutrien’s total return is an impressive 82.47%. As of August 8, 2022, the share price is $109.99 (+16.9% year to date). Market analysts see the price climbing 40.41% to $154.44 in one year. The overall return should be higher to include the 2.24% dividend.
Superior capital growth
Vermilion, Suncor, and Nutrien aren’t dividend titans. However, all three are well positioned to deliver superior capital growth in the near term.
Before you consider Nutrien, you'll want to hear this.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends Nutrien Ltd and VERMILION ENERGY INC.