Despite any problems that might arise, remember that the oil market tends to be a safe place to hold assets for long periods of time. There is quite a lot of growth potential in this sector, and you should keep your eye on the oil industry even as renewable energy becomes a powerful force worldwide. Oil has made headlines during this coronavirus crisis, although not for reasons investors want to see. In addition to issues caused by international events, especially those that impede the safe transport of natural resources.
Devon Energy Corporation (NYSE:DVN)
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- Before investing, your individual circumstances should be considered, and you may need to seek independent financial advice.
- Of course, this is easier said than done and involves a good deal of luck.
- The 50-day moving average in early December crossed above the 200-day moving average, a generally positive indicator.
- These stocks are the top movingoil stocks and may be useful for swing traders and day traders who trades oil stocks.
- 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.
The company now has $8.5B in backlog for future work contracts, double that of the nearest competitor. It is planning to spend big in 2023 with a growing capex budget of $15B, mostly focused on development and exploration, of which a quarter is overseas. So this is a stock with significant political risk and trading at an accordingly severe discount. Exxon distributed $30B to shareholders in 2022, supported by a strong ROCE (Return On Capital Employed) of 25%.
It would also be a sign that Suncor will likely build on its impressive track record of consistent and growing dividends. If you’re interested in finding the best oil stocks for any reason, the following nine companies are a good place to start. Each has a strong foundation based on tangible financial metrics, as well as the ability to weather any short-term challenges. Both offer rather anemic dividend yields of less than 2.3%, and that is not the kind of income potential many investors look for. Furthermore, Marathon and Targa have elevated valuation metrics in comparison to their peers. That’s a warning that potential future financial gains may already be priced into the stocks.
As a result, the deal should supply the company with a lot of free cash flow in 2025 and beyond. 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. Lastly, the company pays a quarterly dividend of $1.42 a share for an attractive 3.2% yield. Finding the best oil stocks can be challenging due to the unpredictable nature of the oil business, with factors like accidents, price fluctuations, and the risks of exploring new oil fields. However, the diversification offered by ETFs can be a solution, allowing investors to gain exposure to the entire sector, not just the producers. Oil demand is expected to persist, and it makes sense to focus on oil companies that have strong production and are able to provide the world with energy for the future.
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- That has it on track to retire all the equity issued to acquire Marathon Oil within the next two to three years.
- If you’re investing in energy for income, it’s very attractive to find an explorer, such as Coterra, that offers a consistent payout but still has the potential for big distributions when times are good.
- They expect the company to deliver average annual EPS growth of 3% over the next three to five years, per S&P Global Market Intelligence.
- Lastly, Valero’s commitment to shareholder returns through dividends and share buybacks underscores its financial strength and commitment to creating value for investors.
- They do not represent the opinions of Vertigo Studio SA (publishers of FinMasters) on whether to buy, sell or hold shares of any particular stock.
The company is investing in increasing its capacity, notably shale oil in the Permian basin, a massive offshore oil field launching in Guyana, and refineries and chemical plant expansions. Have a look at the table below to see Wall Street’s best oil stocks to buy now. One little-known company—almost entirely overlooked by most AI investors—could be the ultimate backdoor play. But it might be the most important AI stock in the US owns critical energy infrastructure assets positioned to feed the coming AI energy spike. And note that it can be especially risky to purchase volatile investments using high-interest debt such as credit cards. If your investments decline in value, you’ll still owe interest on the price you paid for them — deepening your losses.
Diamondback Energy, Inc. (NASDAQ:FANG)
With a significant presence in upstream and downstream activities, ExxonMobil is pivotal in shaping the global energy landscape. The company’s robust portfolio and operational efficiency bolster its resilience in the energy market. However, Exxon grapples with challenges such as fluctuating oil prices, geopolitical uncertainties and a shifting energy landscape, prompting it to pivot towards investments in renewable and cleaner energy sources. Investors eyeing exposure to the energy sector recognize ExxonMobil’s stability but must carefully consider its ability to adapt to evolving market dynamics and the growing emphasis on sustainable energy practices. The performance of oil and gas stocks is closely correlated with crude oil prices. When oil prices surge, oil and gas companies’ stock prices often follow suit, reflecting improved earnings prospects.
That said, there’s one more key fact to understand about Exxon and Chevron. Being financially strong allows them to take on debt when times are tough so they can continue to invest in their businesses and pay their dividends. When energy prices improve again, as they always have, historically, leverage is reduced.
Best Oil And Gas Stocks To Buy Now
Its operational scope extends across Western Canada, the North Sea and Offshore Africa, solidifying its position as a critical player in the global energy landscape. Before investing in any oil stocks, you need to find the right brokerage account for your investments, even if you have your finger on the pulse of crude oil prices. Most major online discount brokers have access to the oil company shares you’re looking for (along with other firms in the energy sector), but beware of fees and commissions.
Investing in oil is typically reserved for advanced commodity traders — if you’re trying to invest in the commodity itself. But if you’re just looking to gain exposure to oil, and to perhaps try to profit from its big swings, oil exchange-traded funds may be a better approach. From breaking news about what is happening in the stock market today, to retirement planning for tomorrow, we look forward to joining you on your journey to financial independence. This article contains general educational content only and does not take into account your personal financial situation.
This all changed with the shale oil revolution, which turned the US back into the world’s leading massive energy producer. We further limited ourselves to stocks with more than 10 Strong Buy recommendations (in order to ensure adequate analyst coverage and sample size). Lastly, we dug into research, fundamental factors, valuation, analysts’ estimates and other data on the top names. But slower economic growth, a softening jobs market and the cumulative effect of years of above-average inflation have also been a weight on the sector.
These factors collectively help assess the industry’s potential for revenue generation, growth and stability. This led to a frenzy of growth in production, with oil prices crashing in 2014 and again in 2020 when demand collapsed due to the pandemic. Since then, shale companies have refocused on shareholders’ returns and production costs instead of growth at all costs. The reluctance of the broad market to price in an acceleration in the crude oil space is likely due to expectations of lower oil prices, primarily driven by an uncertain economic and industrial outlook. A slowing economy generally consumes less oil, which coupled with an increasing supply should put downward pressure on prices. Optimism for the year ahead vanished and the outlook has become one of the gloomiest since the pandemic.
The State of the Oil and Gas Market
Its dedication to technological innovation and operational excellence enhances its competitive edge. However, potential challenges loom, including exposure to commodity price fluctuations, environmental concerns related to fossil fuels, and regulatory shifts affecting the industry. ConocoPhillips has transformed its operations over the years to become a low-cost oil producer. The U.S. oil giant has sold higher-cost oil assets and recycled that capital into acquiring lower-cost resources. It capped its transformation off last year by Best oil stock acquiring Marathon Oil in a $22.5 billion deal. That purchase added over 2 billion barrels of oil and gas resources with an average cost of supply below $30.
Quick Look at the Best Oil Stocks:
Valero Energy is a leading international manufacturer and marketer of transportation fuels and petrochemical products. With headquarters in San Antonio, Texas, Valero operates 15 refineries across the United States, Canada and the United Kingdom. The company’s refineries have a combined capacity to produce approximately 3.2 million barrels per day, making Valero one of the largest independent refiners in the world. Nonetheless, geopolitical tensions, continued easing of Chinese lockdowns, and/or an economic rebound could boost oil prices next year.