For the past decade-plus, the performance record has favored growth stocks over value. Yet the tide may be changing. In 2025, value stocks and growth stocks had similar returns, with growth advancing 13.8% and value returning 13.6%. More than halfway through 2026, value stocks have climbed 16.8% while growth stocks have returned 5.7%. The post COVID-19 economy gave a lift to some of the cyclical companies (energy and regional banks), and value stocks outpaced growth stocks that year. While growth stocks led for a few years after that, history has shown other instances where value stocks have outperformed. Value stocks tend to be more resilient in times of market uncertainty and higher volatility as they are less likely to overreact to economic news. Another factor, in our view, has been the level of interest rates. If interest rates are high, discount rates will be high, and future profits will be worth less, creating an unfavorable environment for growth stocks. In any event, the value sector is the place to achieve income.

Energy and Material stocks are sleepy no more. The war in Iran and the simultaneous race to advance AI have created an enormous need for energy and materials. Demand is up and so is attention on the stocks that supply the power and the materials needed. First, oil and energy companies have benefited from the effort to hedge against oil-supply constraints due to the war and the intermittent closures of the Strait of Hormuz. Year to date, the price of oil has swung from $60 to $110 and is now at around $78. The elevated prices have contributed to the profits of oil and energy companies as they race to accommodate demand. At the same, materials and energy are needed to fuel the growing appetite of AI. Companies involved in the many tiers of AI development are investing in the future by building energy and data storage facilities, as well as the semiconductors and subcomponents that are needed for parts. Argus has a Market-Weight rating on the Energy sector, which comprises 4% of the S&P 500. The sector is the best performing in the S&P 500, up 30% versus 13% for the S&P 500. Meanwhile, we have an Over-Weight rating on the Materials sector, which makes up just 2% of the S&P 500. The Materials sector is also outperforming, up 15%. We just highlighted the Energy and Materials sectors in our monthly webinar, including our stocks that stand to benefit from the above forces. For this week's list, we present the BUY-rated stocks discussed during the webinar.

MPLX is a partnership that owns pipelines and gathering and processing assets with extensive holdings in the Appalachian and Permian regions. The asset base is made up of crude oil and refined products assets dropped down from Marathon Petroleum, its sponsor, and natural gas and natural gas liquids gathering and processing assets that were purchased or built.

Enterprise Products Partners is a master limited partnership that transports and processes natural gas, natural gas liquids, crude oil, refined products, and petrochemicals. It is one of the largest midstream companies, with operations servicing most producing regions in the continental US. Enterprise is particularly dominant in the NGL market and is one of the few MLPs that provide midstream services across the full hydrocarbon value chain.