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5 Best-Performing Stocks of the Top ETF of May

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Invesco Dynamic Energy Exploration & Production ETF (PXE - Free Report) topped the list of the best-performing U.S. equity ETFs in May, gaining about 24%. The rally was driven by rising oil prices on supply disruptions and unprecedented demand.

Although most of the stocks in PXE’s portfolio have delivered strong returns this year, a few have gained more than 35%. These include SM Energy Company (SM - Free Report) , Devon Energy Corporation (DVN - Free Report) , Marathon Oil Corporation (MRO - Free Report) , HF Sinclair Corporation (DINO - Free Report) and Matador Resources Company (MTDR - Free Report) .

Oil resumed its strength and reached its highest levels since March. Both Brent and WTI traded have traded above $115 since Mar 23. The rally is driven by the easing of COVID-19 restrictions in China and the European Union agreement to ban 90% of Russian crude by the end of the year. The dual news will continue to bolster demand and exacerbate worries over the already tightening supply.

Additionally, an inflationary environment in many countries as well as the prospect of rising demand from the start of the upcoming U.S. summer driving season led to a spike in oil price (read: 5 ETF Areas to Gain From Memorial Day 2022 & After).

Let’s take a closer look at the fundamentals of PXE.

PXE in Focus

SPDR S&P Oil & Gas Exploration & Production ETF provides exposure to oil and gas exploration and production companies by tracking the S&P Oil & Gas Exploration & Production Select Industry Index. It holds 32 stocks in its basket with each making up for no more than 6.2% of the assets.

SPDR S&P Oil & Gas Exploration & Production ETF has AUM of $315.3 billion and trades in an average daily volume of 208 million shares. The fund charges 63 bps in fees per year and has a Zacks ETF Rank #1 (Strong Buy) with a High-risk outlook (read: 5 Sector ETFs That Beat the Market in May).

Below we have highlighted the above-mentioned five stocks in the ETF with their respective positions in the fund’s basket:

Best-Performing Stocks of PXE

SM Energy is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition and production of natural gas and crude oil in North America. It has an estimated earnings growth rate of 365.4% for this year. SM Energy makes up for 2.7% share in the PXE basket and soared 39.6% last month.

SM Energy carries a Zacks Rank #3 (Hold) and has a VGM Score of A.

Devon Energy is an independent energy company engaged primarily in the exploration, development and production of oil and natural gas. Devon Energy has an estimated earnings growth rate of 148.4% for this year.

Devon Energy soared about 28.3% in May and makes up for 4.8% share in the PXE basket. The stock has a Zacks Rank #2 (Buy) and a VGM Score of A.

Marathon Oil Corporation is a leading oil and natural gas exploration and production company with operations in the United States and Africa. The stock rallied 26% in May. It makes up for 2.6% of the XOP portfolio.

Marathon Oil Corporation has an estimated earnings growth rate of 214.6% for this year. It has a Zacks Rank #1 (Strong Buy) and a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

HF Sinclair is an energy company, which produces and markets light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. The stock jumped 25.6% last month and accounts for 2.6% share in the ETF.

HF Sinclair has an estimated earnings growth rate of 404.6% for this year. It has a Zacks Rank #2 and VGM Score of A.

Matador Resources is among the leading oil and gas explorer in the shale and unconventional resources in the United States. The stock rose 23.5% last month and has an estimated earnings growth rate of 156.5% for this year (read: 5 Leveraged Oil-Energy ETFs Up More than 80% YTD).

Matador Resources currently carries a Zacks Rank #1 and has a VGM Score of B. It accounts for 2.6% allocation in the PXE basket.

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