Shares of PSX have shot up by nearly 31% in the past year, fueled by higher prices for commodities and strong quarterly results. Jefferies analyst Lloyd pepperstone forex Byrne is upbeat about SLB with a Buy rating. He also has a price target of $70 on the stock, representing implied upside of 16.3% from current levels.
- As the world ramps up the fight against global warming, global leaders could enact more regulations limiting the use and production of some sources of energy, like fossil fuels.
- As a result, ConocoPhillips remains a top oil stock to watch for 2022.
- For example, it boosted its 2022 plan by $5 billion in August of that year, pushing its total to $15 billion.
- For context, Brent crude has traded in a 52-week range of $70.12 to $125.19 per barrel, so Goldman Sachs’ forecast represents something of a return to the “good old days” of 2022.
- There are plenty of generous dividend payers on this list, and Diamondback is worth a look for its income potential.
Oil and gas stocks as a group, measured by the benchmark Energy Select Sector SPDR ETF (XLE), have climbed by 10% in the past year, outperforming the broader market. However, declining oil and gas prices in the second half of 2022 and into 2023 could pressure margins and revenues in the sector. The energy sector struggled throughout the Covid-19 pandemic, due to less travel and overall demand. Now that the world is beginning to reopen, there could be a new surge in travel, pushing up demand and prices for the best energy stocks. Headquartered in Houston, TX, EOG Resources engages in the development and production of oil and natural gas.
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And this is also the season where home heating costs rise in correlation with falling temperatures. The dividend’s decline should end now that oil prices have rallied and will likely begin heading higher. That’s why experts recommend you take a diversified approach to investing. Rather than investing in just a few stocks, they say you should pick tens, hundreds or even thousands.
If you’re looking to increase your profits with your portfolio, consider these seven excellent energy stocks. But it has been more opportunistic with share repurchases this year, given the 20% decline in its stock price from its 52-week high. lmfx review The best way to invest in renewable energy is to buy mutual funds or exchange-traded funds that build portfolios of green energy companies. There are a wide variety of renewable energy funds managed according to different strategies.
Seventeen analysts covering DVN tracked by S&P Global Market Intelligence call it one of the best oil stocks to buy now, at Strong Buy. They expect the firm to deliver average annual EPS growth of 6% over the next three to five years. Meanwhile, shares trade at just 8.9 times their 2022 earnings estimate. EOG Resources (EOG) is another oil and gas exploration and production company that analysts say is primed to pump gushers of free cash flow back to its shareholders.
Its marketing and specialties business distributes refined products and manufactures specialty products such as lubricants. Enbridge’s pipeline operations generate stable cash flow backed by long-term contracts and government-regulated rates. That gives it the cash to pay a high-yield dividend while also investing to expand its energy infrastructure operations. Enbridge operates one of the biggest oil pipeline systems in the world. Enbridge also has an extensive natural gas pipeline system, a natural gas utility business, and renewable energy operations.
You can buy energy stocks in a taxable brokerage account or tax-advantaged retirement account, like an individual retirement account (IRA). If you don’t already have one of these accounts—or you aren’t satisfied with your current broker—check out Forbes Advisor’s list of the best online brokerages. New sources of green energy, like solar, have become dramatically an introduction to dukascopy less expensive over the past decade. This is cutting into the demand for coal and could also start hurting demand for oil, gas and other traditional energy sectors, potentially jeopardizing their long-term value. Valero Energy (VLO, $133.12) is an American oil refinery that manufactures and markets transportation fuels and other petrochemical products.
- However, ExxonMobil is making investments in lower-carbon fuel sources, including carbon capture and storage, as well as biofuels.
- Providing investment advice to tens of thousands of investors for more than three decades, he has earned a reputation as a savvy stock picker and unrivaled portfolio manager.
- Unlike more traditional methods of oil exploration and production, it is more costly to get usable fuel out of oil sands, which are a mixture of sand, clay, water and a dense form of petroleum.
- Chevron just announced its capital budget for 2023, and it expects to spend 25% more, or $14 billion, on organic growth next year versus 2022.
- The deal was first announced in November 2022 but still hasn’t come together; it recently got an extension from shareholders to close the merger by March 1, 2024.
- Indeed, even in Q2, EOG’s production of oil, natural gas and natural gas liquids was well above its midpoint guidance.
This was off the back of oil supply constraints, which has led to oil prices surging 17% in January 2022. 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.
Investing in Oil Stocks That Pay Dividends
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 the company to generate lots of cash flow. Based on this reality, Hess Midstream Partners deserves consideration for your portfolio of oil stocks. For one thing, midstream operators represent one of the more stable components within the energy supply chain. As an example, pure exploration firms live or die by discoveries, which is a volatile way of making a living.
Crescent Point Energy (CPG)
On the whole, the pros see Diamondback as one of the best oil stocks you can buy now. Of the 33 analysts covering FANG tracked by S&P Global Market Intelligence, 20 rate it at Strong Buy, seven say Buy and six have it at Hold. Their average target price of $94.19 gives this oil stock implied upside of about 21% over the next year or so. CFRA’s Glickman is very much in the majority when it comes to his stance on the oil stock. Of the 34 analysts covering PXD tracked by S&P Global Market Intelligence, 19 rate it at Strong Buy, nine say Buy and six have it at Hold.
Suncor Energy Inc. (SU)
Just as importantly, Kinder Morgan enjoys strong profitability metrics. Specifically, its operating margin of 20.5% and net margin of 13.2% stand higher than at least 67% of the industry. Plus, as a bonus, Gurufocus.com labels KMI as modestly undervalued.
The company was created in 1999, via a merger of Exxon and Mobil, the successors of John D. Rockefeller’s Standard Oil Company. With headquarters in Irving, Texas, ExxonMobil’s core business is the exploration, production and trade of crude oil and natural gas as well as manufacturing petroleum products. Crude prices rocketed into the triple digits following Russia’s invasion of Ukraine. However, they’ve since given back most of those gains on concerns that rising interest rates to combat inflation will drive the economy into a recession next year, denting oil demand.
But more importantly for long-term income investors, distributions have marched steadily higher as well. Quarterly payouts are now up to $1.02 per share, up from 80 cents back in 2018. Income of $18.2 million included earnings per share of 13 cents, which was an improvement of $1.7 million and 5 cents per share a year ago. Revenues in the second quarter were at an all-time high for the company, coming in at $175.4 million, versus $140.7 million a year ago. Seadrill also authorized a $250 million stock buyback program, which will bring more value to shareholders.
In the past few months, Diamondback closed a $2.2 billion deal for QEP Resources and acquired assets of privately held Guidon Energy for nearly $1 billion. He’s also written for Esquire magazine’s Dubious Achievements Awards. Raymond James analyst John Freeman praises EOG’s position as one of the largest producers in North America, “with established positions in every major on-shore shale play.” Just as importantly, I’m not entirely sure if the work-from-home phenomenon will be permanent. Honestly, it doesn’t make any sense for companies to pay a 100% salary for employees that will be in the office 0% of the time. But a factor that truly separates Denbury from the competition is its utilization of tertiary oil extraction techniques, also known as enhanced oil recovery (EOR).
Add it all up, and ExxonMobil makes for one heck of an oil stock to buy now on OPEC’s latest move. Conservative income investors should see the current price moves not as a signal to buy or sell a stock but as a warning that it is best to err on the side of caution when selecting a long-term energy investment. That pretty much pushes you into the diversified integrated energy giants, a list that includes ExxonMobil, TotalEnergies (TTE 1.53%), BP (BP 1.83%), Shell (SHEL 1.26%), and Chevron. Of this group, Chevron currently has the strongest balance sheet, with a debt-to-equity ratio of just 0.17 times.