Best oil stock: 11 Best Crude Oil Stocks To Buy As Tensions Rise
We analyzed the global crude oil market and chose the best stocks to buy, keeping their hedge fund sentiment as the most important metric and taking the analyst ratings around each stock into consideration. Most of the companies on the list have strong balance sheets and have maintained good profitability over the years. Investors who bid up shares in such firms were simply following the money as rising oil prices filled the exploration and production companies’ coffers.
Add in the generous dividend yield of 8%, and FANG’s implied total return comes to more than 30%. With an average price target of $130.42, Wall Street gives COP implied price upside of about 22% in the next 12 months or so. Add in the dividend yield, and the implied total return comes to about 25%. 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.
Pioneer Natural price target raised to $278 from $266 at Susquehanna Susquehanna analyst Biju Perincheril raised the firm’s price target on Pioneer Natural to $278 from $266 and keeps… Go to the Stock Comparison tool to compare more stocks on key indicators. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
In addition to issues caused by international events, especially those that impede the safe transport of natural resources. Even in a perfect work, this sector can be quite volatile as supply and demand are constantly shifting. That’s why it’s important to learn all you can about oil stocks. Enbridge owns extensive midstream assets that transport hydrocarbons across the U.S. and Canada. Its pipeline network consists of the Canadian Mainline system, regional oil sands pipelines, and natural gas pipelines.
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If they allocate too much capital to new projects, they can cause an oversupply and weigh on prices. Since oil and gas assets are developed over a long time, companies cannot quickly increase their supplies in response to favorable market conditions. One of the largest oil companies on the planet, ExxonMobil is a fully integrated supermajor.
A strong financial profile with an investment-grade bond rating, significant amounts of cash on hand or ample access to affordable credit, and manageable, well-structured debt maturities. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site.
Are oil and gas companies a good investment?
Enbridge also has an extensive natural gas pipeline system, a natural gas utility business, and renewable energy operations. Oil stocks, like the companies they represent, tend to do best when oil prices are high. However, it’s hard to resist buying quality companies when prices reach historic lows like these. Oil won’t stay low or high forever, but you can be sure that the price of a barrel is trending up over the long term.
They’ll collect a steady base dividend that’s sustainable throughout the oil price cycle and have the potential to earn significant payments during periods of high prices. 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. 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. These are the oil stocks in the S&P 500 Index with the best one-year performance. There are several types of oil companies whose stock is publicly traded — each with their own set of potential upsides and drawbacks.
Devon Energy
Crude oil prices went flying shortly after the Russian invasion of Ukraine to around $119 per barrel on March 6 due to sanctions on Russian fossil fuel imports by the USA and part of Europe. However, the prices have dropped down to the pre-war levels with crude oil trading at around $74 per barrel WTI. Meanwhile, the Street’s average price target of $172.97 gives FANG implied price upside of about 23% in the next 12 months or so.
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Oil is a finicky industry – be sure to do your homework before investing in a sector facing unprecedented uncertainty. Baker Hughes in its current form originated in 2017 from the merger of Baker Hughes with GE Oil & Gas. Meanwhile, the Street’s average target price of $144.87 gives EOG stock implied upside of about 23% in the next year or so. Add in the dividend yield, and the implied total return tops 25%. To that end, we screened the S&P 500’s oil & gas sector for oil stocks with the highest consensus Buy recommendations, based on S&P Global Market Intelligence data.
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. Overall, though, it’s important to remember that oil stocks, like the companies they represent, will likely do better if oil prices are high.
Schlumberger’s next Ex-dividend date is June 6, 2023 and its next payout date is July 13, 2023. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Investing in Liquefied Natural Gas Stocks Natural gas must be liquefied to travel long distances.
Integrated oil companies have some aspects of production, services and refining all in-house. This can mean that their risks are spread out more broadly than companies that specialize in one aspect of the oil industry. Although it’s possible for investors to brave commodities markets and invest in oil directly, buying equities in oil companies can be more approachable for everyday investors, and potentially less risky.
Unlike many of its peers, however, FANG has managed to generate positive returns in 2023, gaining 5.7% for the year-to-date. Of the 31 analysts covering the stock tracked by S&P Global Market Intelligence, 16 rate it at Strong Buy, eight say Buy and seven have it a Hold. That works out to a consensus recommendation of Buy, with high conviction. Of the 26 analysts covering COP tracked by S&P Global Market Intelligence, 12 rate it at Strong Buy, seven say Buy, six have it at Hold and one slaps a rare Sell rating on shares.
That said, the industry also has some negative features that increase risk for investors. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers. Meanwhile, oil companies that operate independently of OPEC can also have an impact on oil prices.
Many of the largest oil companies like ExxonMobil are known as integrated oil producers since they have branches involved in upstream, midstream and downstream operations. When buying oil companies, be sure to understand what sector of the industry they reside in. Plus, the sector of the industry where the company works changes the way they operate and adjust to market shifts. For example, a smaller downstream company might have more room to adjust to a shifting market where a larger midstream company might not. Carefully considering your options and monitoring their performance is the best way to keep your portfolio in good condition. TotalEnergies is an integrated oil and gas company that explores for, produces, and refines oil around the world.
At the end of 2020, it reported net proved reserves of 3.2 billion barrels of oil equivalent. Net production averaged 754 thousand barrels of oil equivalent per day in 2020 at a ratio of 72% oil and natural gas liquids and 28% natural gas. Low costs of operations or relatively stable cash flow streams. Downstream companies should have operating costs below the industry average.
