These 3 Beaten-Down Energy Stocks Could Have Further to Fall

Crude oil prices remain under pressure due to weak demand, while natural gas prices are trending higher as the European Union plans to phase out Russian natural gas imports, and other factors could lead to further turbulence in gas prices.

While issues related to commodity prices may be causing turbulence in the energy sector, however, keep in mind that there are some energy stocks for which oil and gas prices are the least of their problems.

Prime examples are the following three energy stocks: Oneok (NYSE: OKE), Occidental Petroleum (NYSE: OXY), and the Williams Companies (NYSE: WMB). Each one has declined either recently and/or year to date, and each remains at risk of a further drop.

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Oneok isn't fully out of the woods on execution risk

Oneok owns midstream energy assets like oil and gas pipelines. Share prices are down around 30% year to date. Previously, investors worried that a series of big mergers and acquisitions completed last year would not pay off for investors.

But Oneok's latest earnings release suggests that these deals are starting to pay off. For the quarter ending Sept. 30, 2025, the company reported earnings per share (EPS) of $1.49, up 49% year over year. However, the jury's still out on whether this was the start of a trend.

If, in the coming quarters, EPS growth disappoints once again, the stock may keep tumbling. Despite the positive news, investors are still sitting on the sidelines. Consider taking their lead.

A recent Buffett deal is bad news for Occidental Petroleum.

In the past, Warren Buffett's involvement with Occidental Petroleum has been a positive for shares. More recently, however, the company's dealings with Buffett have arguably been negative. In early October, Occidental sold its OxyChem division to Buffett's Berkshire Hathaway for $9.7 billion in cash.

Yet while investors have already reacted negatively to this deal, shares may have further to fall, as the market continues to digest what is seen as an unfavorable transaction. The problems for Occidental with this deal are manifold.

For one, an all-cash sale was likely the least tax-efficient way to divest OxyChem. The company also remains on the hook for $1 billion in past OxyChem environmental liabilities. The final sale price was also well below sell-side analyst estimates.

The stock has a forward price-to-earnings ratio (P/E) of 16, on par with competitors, but the market could continue to price these issues into the shares, pushing this stock to a discounted valuation.

Valuation concerns could keep weighing on Williams Companies

Williams Companies is another one of the major pipeline stocks. The company owns high-quality midstream assets like the Transco pipeline, which delivers natural gas from the Gulf Coast to the New York City area, and it has a history of earnings and dividend stability. Even so, it has one big issue: Shares appear pricey compared to its peers.

Currently, the stock trades for 27 times forward earnings. Compare that to competitors like Enbridge and Kinder Morgan, which trade for 21 and 20 times earnings, respectively. Furthermore, Williams' 3.5% forward dividend yield is far lower than Enbridge and Kinder Morgan, which have forward yields of 5.7% and 4.5%, respectively.

Williams Companies' share price has fallen by around 10% over the past month, and concerns about its relatively high valuation could keep weighing on its stock price.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Enbridge, and Kinder Morgan. The Motley Fool recommends Occidental Petroleum and Oneok. The Motley Fool has a disclosure policy.