The reach of its integrated operations extends into multiple aspects of the oil industry. Chevron forecasts increasing production at a compound annual growth rate (CAGR) of 3% over the next five years. According to management, the projected growth is attributable to the company’s assets in the Gulf of Mexico and the Permian Basin. The increased production is expected to power growth in the company’s financials. During the first week of February 2022, Brent Crude Oil topped $90.00 per barrel for the first time since October 2014.
- In addition, Williams’ dividend yields 5.3%, and was last reduced in 2017.
- To help you understand this key market sector, we’ve profiled the 10 largest energy companies by market capitalization so you can decide which are right for your investment portfolio.
- The declines have created an opportunity you don’t see often — a growth stock that can make value investors drool.
But soon after the spring doldrums of 2020, vehicle miles traveled in the U.S. (and other nations) rebounded. Domestically, the recovery rally was sharp as people who had been cooped up in their homes just had to get Heiken ashi out. Plus, with air travel becoming a questionable transportation method, people preferred to travel the open road for their vacations. This too had a positive effect on fuel prices and subsequently oil stocks.
Oil Stocks to Buy: Hess Midstream Partners (HESM)
When the bears take hold of the market, it’s easy to second-guess your investment decisions and difficult to find anything you’d be interested in piling your money into. However, no matter how red the market is, there’s always a glimmer of green. This statement remains true even as renewable energy sources are becoming cost competitive with oil. The simple fact is that the world will still be using oil for the near future.
- 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.
- So far this year, the Dow Jones U.S. Oil & Gas Total Stock Market Index is up almost 35%.
- We saw that in early 2022 after Russia’s invasion of Ukraine, which sent crude prices soaring into the triple digits for the first time in years.
- We believe everyone should be able to make financial decisions with confidence.
If oil prices go down, drilling becomes less profitable, and producers are less likely to spend money on equipment and services. If the price goes up, producers may spend more on oilfield services as they try to reach reserves that are more difficult to extract. Bulls cite FANG’s compelling valuation – as well as management’s commitment to returning cash to shareholders through buybacks and dividends – as just a few reasons to be constructive on the name. The production cut announced by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) has dramatically changed the outlook for oil prices in 2023 and beyond, analysts say.
This was off the back of oil supply constraints, which has led to oil prices surging 17% in January 2022. Launched in 1924 as an oil and gas company, TotalEnergies is the largest energy company in France. Its current core business focuses on finding, drilling and refining oil and gas.
You simply divide the number 72 by the percent annual return in an oil share. Nonetheless, I should remind readers that high returns typically mean higher degrees of volatility and risk, at least in the short-run. Therefore, readers interested in growth shares should research their chosen stocks and buy them for the long-haul.
Are oil and gas companies a good investment?
It bulked up its position in that low-cost, oil-rich region in 2021 by acquiring Concho Resources and Shell’s assets in the area. With average costs of about $40 per barrel and many of its resources even cheaper, it can make money in almost any oil market environment, enabling euro vs.dollar history the company to generate lots of cash flow. With an average target price of $41.57, analysts give WLL implied upside of about 13% in the next 12 months or so. Shares trade at 8.2 times analysts’ estimated earnings for 2022, according to S&P Global Market Intelligence.
Risk management is the key to investing in the oil patch
Canadian Natural Resources discovers and develops crude oil and natural gas fields. Shares trade on the NYSE, but since it’s based in Canada the firm is not an S&P 500 component. However, a market value of more than $60 billion would rank it among the top seven energy stocks in the benchmark index—above some of the more recognizable U.S. names on this list. Oil stocks were some of the few shining stars during the bear market of 2022.
The 7 Best Oil Stocks to Buy Now
Phillips 66 is a diversified energy manufacturing and logistics heavyweight that also has oil refining stations. “Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising,” notes Zacks Equity Research, which rates shares at Strong Buy. “We expect an above-average return from the stock in the next few months.” PDCE trades at just 7.7 times estimated earnings for 2022 – even as analysts project average annual EPS growth of 7% over the next three to five years. Analysts’ average target price of $47.00 gives PDCE implied upside of about 33% over the next year or so.
Q4 earnings showed earnings of $8.9 billion, or $2.08 per share. Its cash flow of $48 billion from operating activities was the highest amount since 2012. Devon Energy has operations across most major hydrocarbon basins stateside. The energy group ended Q4 with a free cash flow (FCF) of $2.9 billion, the highest level in the company’s long history. Russia’s invasion of Ukraine was the catalyst behind the most recent surge in the price of oil.
What Are Good Oil Stocks?
This in turn affects oil stocks which as we said tend to move with the market. Its share price has risen 50% to $25 in the last year as the price of crude oil has climbed. In addition to the share price appreciation, other reasons to like MRO stock include its 1.42% dividend yield, $3 billion stock buyback program, and its low P/E ratio of 4.88.
That lets me own a growing energy business and a growing renewable power business with one single investment. Duke Energy is continuing its mission to provide its customers with quality, fairly priced services. As it does, it gives its investors stable returns, More Money Than God consistently paid dividends, and an easier time going to bed at night regardless of the state of the economy or broader market. All earnings come from upstream and downstream production while it loses money by investing in future-forward technology.
Companies that look and drill for oil are among the most volatile stocks in the oil space, Jones says, and their prices are very responsive to short-term trends. This can be a benefit if you buy at the right time or if the company you’re investing in makes a significant discovery of natural resources. There are companies that find and pump oil, companies that provide oilfield services, companies that refine oil and integrated companies that do it all.