8 Natural Gas and Energy Stocks. Are They Halal?

8 Natural Gas & Energy Stocks. Are They Halal_

In this article, we will take a look at 8 natural gas and energy stocks and see if they are halal or not. It will be a helpful blog if you are looking for where to invest your money.

 

What is the state of natural gas stocks?

Due to the recent geopolitical issues happening in the world, considering the war between Russia and Ukraine, natural gas prices are highly affected. The global demand for natural gas – specifically LNG (liquefied natural gas) is expected to double over the next decades. Especially, European countries are searching for ways to import more LNG to reduce their reliance on Russia. Of course, it opens new opportunities for US companies that export natural gas, which means these companies can increase their revenue.

So, here is the list of the stocks that deal with producing natural gas and some that manage the infrastructure associated with the energy source.

Company NameWhat the company doesCurrent price1-year target priceSharia-Compliance status
Kinder Morgan Inc. (KMI)Texas-based energy infrastructure company$17.04$20.49Not halal
Cheniere Energy (LNG)The biggest national producer of LNG$171.67$193.68Not halal
EQT Corporation (EQT)Pittsburgh-based natural gas producer$43.53$63.26Not halal
Shell Plc (SHEL)the world’s leading natural gas and LNG suppliers$50.32$69.31Not halal
DCP Midstream, LP (DCP)U.S.-based company specializing in gathering, processing, compressing, storing, and transporting natural gas$37.72$44.17Not halal
Coterra Energy (CTRA)A diversified energy company$29.80$36.64Not halal
Range Resources Corporation (RRC)Ft. Worth-based natural gas exploration and production company$27.79$39.48Not halal
Tellurian Inc (TELL)  Texas-based natural gas producer $2.54 $5.00Halal
* All stock prices are based on the closing of October 12, 2022

Why are most energy stocks not Halal?

All these natural gas stocks were found to be not halal except Tellurian Inc at our screening process. According to the AAOIFI methodology that we use to screen stocks, the stock/company must successfully pass business activity, Interest-bearing securities, and interest-bearing debt screening to be Shariah compliant. We found that almost all of these not halal stocks fail from the financial screening. Their interest-bearing debt ratio is much higher than the allowed 30% threshold. When the company has interest-bearing debt over 30%, this company is not qualified as Shariah-compliant stock. And for Muslim investors, it is better to stay away from not halal stocks.

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