1 Overlooked Sector That's Helping Fuel the S&P 500 to Record Highs

Core Insights - Energy stocks have significantly outperformed the broader S&P 500 index in 2024, contributing to the index's record-setting performance [1][2] - Rising crude oil prices, driven by OPEC's supply management and geopolitical tensions, have been a major factor in the strong performance of energy stocks [2][7] Energy Sector Performance - The S&P 500 index is up over 10% in 2024 and over 25% in the past 12 months, with energy stocks playing a crucial role in this growth [1] - Brent crude oil prices have increased by approximately 7% to over $80 per barrel, while WTI prices have risen nearly 10% to just under $80 per barrel [2] Company Highlights - ExxonMobil reported nearly $14.7 billion in cash flow from operating activities in Q1 2024, a $1 billion increase from Q4 2023, and achieved a nearly 18% gain in its share price this year [3] - Targa Resources experienced a record year in 2023 with a 22% increase in adjusted EBITDA and expects 8% growth in 2024, leading to a 50% dividend increase [4] - Diamondback Energy generated over $1.3 billion in cash from operating activities in Q1 and is set to enhance its cash flow through the acquisition of Endeavor Energy Resources [5] - Valero reported strong Q1 results despite maintenance activities and is expanding into renewable fuels, which positions it well for future earnings growth [6] Industry Outlook - The energy sector is benefiting from rising oil production and demand, allowing companies to generate cash for expansion and shareholder returns [7] - Despite the global shift towards lower-carbon fuels, oil and gas will remain essential for decades, making energy stocks a potential source of high returns [7]