Goldman says these underappreciated energy stocks will provide big returns to investors

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The Esso Fawley Oil Refinery, operated by Exxon Mobil, stands in Fawley, U.K., on Thursday, May 14, 2020.

Luke MacGregor | Bloomberg | Getty Images

Energy stocks may be at multi-year highs amid a recovery in oil and gas prices, but Goldman said there are still several names that offer upside for investors.

Specifically, the firm said investors should focus on asset quality and resource value over the long-term, rather than prioritizing companies that can provide return on capital through the first half of 2022.

Analysts led by Neil Mehta expect oil demand to be higher in 2030 than it is today — unlike some who believe peak demand is behind us — and said that investors can capture this upside by buying upstream stocks.