Thanks to falling crude prices, oil stocks are on the backfoot this year. The best oil stocks have been caught up in the volatility, but their more modest declines illustrate the long-term staying power unmatched by more fashionable energy plays. Since it was spun off from ConocoPhillips, Phillips 66 has been consistently rewarding shareholders with a dividend. From 2013, the first year it paid dividends in four quarters (after going public in the middle of 2012), through the end of 2022, Phillips 66 has increased its dividend at an 13% CAGR.
- Devon Energy offers a feast-or-famine proposition to its shareholders that differentiates it from other energy firms.
- The bottom line, bulls say, is OVV is a turnaround story that really is starting to turn.
- But if you do want to hold oil in your portfolio, there are plenty of ways to do it.
- Shares are up an impressive 40% or so in the last 24 months, compared with a mostly flat S&P 500 in the same period.
It is the largest descendant of John D. Rockefeller’s Standard Oil. Then formed in November 1999, when the two companies Exxon and Mobil merged. Enbridge Inc is a highly diversified energy infrastructure company based in Calgary, Canada. It operates oil and gas pipelines throughout the U.S. and Canada, and derives a large part of its revenue from top natural gas stocks natural gas refining, transport and storage. Enbridge also operates in the renewable power generation sector, with wind, solar and geothermal generation assets. Second, while CVX stock is up 45% over the last year at $173, the shares still do not look overvalued with a price-earnings ratio of only 9.85 and a market capitalization of $335 billion.
Buy the stock
That works out to a consensus recommendation of Buy, with fairly high conviction. At Goldman Sachs, analyst Neil Mehta (Buy) continues „to see underappreciated value at Phillips 66,” noting that shares have underperformed relative to peers this year. Indeed, S&P Global Market Intelligence tracks only eight analysts who cover the independent E&P company. Six of them call WLL stock a Strong Buy, one says Hold and one has no opinion. Analysts like this small-cap’s base of assets and its ability to punch well above its weight in generating free cash flow (FCF). „PXD is building a powerhouse of a Permian Basin play, with no federal land exposure,” writes CFRA Research analyst Stewart Glickman, who rates shares at Buy.
Our estimates are based on past market performance, and past performance is not a guarantee of future performance. However, it’s important to point out that society has never quite returned to normal. When it does, the resultant boon in activity could send XOM shares flying.
The stock also pays a monster dividend that currently yields 8.8%, which is good for a quarterly payout of $1.29 per share. Chesapeake, like PDCE, is benefiting from strategic acquisitions. best forex trading platform In early March, the company closed its deal for privately held Chief E&D Holdings for $2.6 billion. That represents the firm’s second major acquisition since late 2021.
S&P Global Market Intelligence surveys analysts’ stock recommendations and scores them on a five-point scale, where 1.0 equals a Strong Buy and 5.0 is a Strong Sell. It’s a good idea to read up on the stocks you want to buy before you dive in. Industry news coverage, analyst reports and company financial statements can help you get more comfortable with your decision. There are several online brokers that can help you buy stock in oil companies.
- Of the 28 analysts issuing ratings on FANG tracked by S&P Global Market Intelligence, 16 call it a Strong Buy, eight say Buy, three have it at Hold and one calls it a Sell.
- Equinor runs major offshore oil and gas projects on the continental shelf of Norway and the U.K., as well as fields in Brazil, the United States and Nigeria.
- They found that professional investors whose job is to turn changes in commodity prices into cash profits had a hard time doing so.
- The moves were met with approval by analysts who cover oil stocks.
While it’s natural to worry about the viability of oil stocks amid a political wave favoring clean technologies such as electric vehicles, the transition to green won’t happen overnight. More critically, workers who have been struggling to make ends meet prior to the pandemic won’t care so much about ideological pandering if they can’t put food on the table. With politicians from the entire spectrum concerned about domestic energy and economic independence, DEN is a name you’ll want to watch closely among your top oil stocks. For years heading into the Covid-19 crisis, XOM suffered — as did many other oil stocks — as disruptive events and declining relevancy hurt investor sentiment. And to be clear, XOM has still not recovered to its price point just before the coronavirus ruined everything. Later, as the calendar turned the page to 2021, the vaccination rollout began in earnest.
Investing in Top Oil Stocks
Indeed, COP, with a rating of 1.50, is the first of our oil stocks to get a consensus recommendation of Strong Buy. The moves were met with approval by analysts who cover oil stocks. With an average price target of $30.35, the Street gives this oil stock implied upside of about 38% in the next 12 months or so.
The energy sector has torched the market in 2022, but the pros say that even after breathtaking gains, these oil and gas stock picks have at least 20% more upside. ConocoPhillips is one of the largest E&P-focused companies in the world. It specializes in finding and producing oil and natural gas and has operations in more than a dozen countries. Oil industry bulls can also be skeptical of a recent acquisition an oil company might have made.
Which Oil Stocks Pay Dividends?
Refiners can wind up charging less for their products than they cost to make. But shares in oil producers can also be vulnerable to downturns in the oil market that affect their ability to make a profit on what they pull out of the ground. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other Equity in forex content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues.
What Makes Oil a Good Investment?
E&P companies often carry significant amounts of debt on their balance sheets; EOG Resources ended 2022 with a net cash position of $900 million, which should appeal to conservative investors. Proving to be adept at managing its capital, EOG has also demonstrated a commitment to returning cash to shareholders. If the company meets its target of paying out $3.30 per share in dividends, EOG will have raised its dividend at a 22% CAGR since 1999. The tightening of supply and the recovery in global demand certainly bodes well for many oil and gas companies, and some could be huge winners in the near term. However, if energy investors should have learned anything over the past decade, it’s that market conditions can change quickly.
That means focusing on those with relative immunity to price fluctuations, such as E&Ps with ultra-low production costs and integrated oil giants. Another way to invest in the oil patch is to focus on using it to generate dividend income. Because of this dynamic, investors need to be careful when choosing oil stocks.
In the most recent quarter, UGI produced 34%+ revenue growth, 90%+ net income growth, 85%+ diluted earnings growth, and 42%+ net profit growth. First, let’s address the elephant in the room — the 123 P/B ratio. The company has few tangible assets because it’s in the service sector. European nations are expected to ban more than two-thirds of Russian oil imports within the next year, which could send oil prices headed for the top yet again. The Organization of Petroleum Exporting Countries (OPEC), the world’s largest oil cartel, recently announced plans to boost oil production. The announcement sent DVN falling, giving up much of the gains it’s seen this year already.