Welcome to our comprehensive guide on oil stocks. In this article, we unveil a curated list of undervalued stocks deserving of a spot on your radar.
Stay ahead in the dynamic world of investments as we highlight opportunities that could potentially boost your portfolio. Get the info you need to make smart choices and uncover the hidden potential in the world of oil stocks.
How To Buy Oil Stocks?
Buying these types of stocks involves a series of steps. Before you proceed, it's essential to note that investing in stocks carries inherent risks, and you should consider your risk tolerance and conduct thorough research before making any investment decisions.
Here's a general guide on how to buy oil stocks:
- Educate Yourself: Learn about the oil industry and stock market basics.
- Define Goals: Determine your investment objectives and risk tolerance.
- Choose a Brokerage: Open an account with a reputable online brokerage.
- Research Companies: Evaluate financials, growth prospects, and news of oil companies.
- Monitor Oil Prices: Track oil prices as they impact stock performance.
- Place Order: Use your brokerage account to buy shares, either at the market price or a specified limit.
- Monitor Investments: Regularly check on your investments and stay informed about industry trends.
- Consider Reinvestment: If applicable, reinvest dividends for additional shares.
- Diversify Portfolio: Spread risk by diversifying your investments.
- Stay Informed: Keep up with industry news, economic trends, and regulatory changes.
Coterra stands out as one of the best oil stocks to buy with a strong cash flow and a variety of assets in oil, natural gas, and natural gas liquids. This mix helps lessen the ups and downs in the industry. They've got top-notch assets with lots of drilling possibilities and manage to keep costs low.
Offering an attractive quarterly dividend of $0.20 per share, equivalent to a 4.76% annualized yield. With a history of strong Earnings Per Share (EPS) growth, exemplified by a Q3 2023 EPS of $0.43 surpassing estimates, Coterra showcases the potential for sustained returns.
Chevron, a big player in the oil business, has strengthened its position with important deals in the last four years. One standout is the $5 billion purchase of Noble Energy in October 2020. This move expanded Chevron's footprint in the Permian Basin and Colorado's DJ Basin.
They made strategic moves to grow its renewable energy production. Another big step was the $6.3 billion all-stock deal for PDC Energy in May 2023. These actions set Chevron up for growth in production and free cash flow.
You can consider EOG Resources as a potential invest in oil stocks with its robust financial performance, consistently exceeding earnings estimates. EOG's strategic focus on producing in shale-rich areas sets them up for growing reserves and future production increases.
Led by an experienced management team, EOG benefits from industry expertise in finding and developing profitable resources. Additionally, with a competitive 3.31% dividend yield and a history of share repurchases, EOG demonstrates shareholder-friendly policies.
With a quarterly dividend of $1.15 per share, it is a strong option with a 4.31% annualized yield. Their yearly earnings have been consistently growing, averaging around 25% in the last three years, showing potential for increased value over time.
Furthermore, this stocks to invest in commits to enhancing shareholder value is exemplified by its history of share repurchases. In the realm of energy investments, ConocoPhillips presents a compelling combination of strong dividend returns with steady earnings growth.
What makes Devon Energy Corporation (DVN) a compelling choice in the energy sector is its remarkable combination of a high dividend yield. With an enticing dividend yield of 6.97%, well above the industry average and exceeding some peers.
Boasting a 69-year history of dividend payments and a commitment to annual increases, the company has demonstrated a compounding annual growth rate of 10% over the past 29 years. The company's proactive approach to reducing debt levels further strengthens its financial health.
Enbridge offers an enticing 7.58% forward annual dividend yield, surpassing the S&P 500 average. With a 69-year history of dividend payments and a 10% compound annual growth rate over the past 29 years, it demonstrates a commitment to rewarding shareholders.
Operating in the stable energy transportation sector, its earnings are expected to grow moderately at 4-6%. However, the elevated payout ratio of 234.83% raises concerns about the long-term sustainability of the high dividend.
Thinking about investing? Suncor Energy is a big player in the energy game, dealing with oil sands, regular oil and gas, and renewable fuels. They're holding their ground in the industry and offer a solid dividend yield of 5.11%, which is better than the sector average.
Looking ahead, Suncor is gearing up for growth by investing in things like wind and solar power. This forward-thinking approach sets them up to ride the wave of changes in the energy world, potentially bringing in long-term gains.
What oil stocks to buy? Consider Exxon Mobil, a stalwart in the energy sector that not only offers a high dividend yield of 3.93% but also boasts a remarkable 67-year track record of consecutive dividend increases.
With a global footprint spanning over 50 countries, the company enjoys exposure to diverse markets, presenting ample growth opportunities. Moreover, as the energy landscape evolves, Exxon Mobil strategically positions itself by increasing investments in renewables.
Hess Corporation is a promising energy sector option due to its diverse operations, offering exploration, production, refining, and retail. With a dividend yield of 1.28% and positive EPS growth projections in the 4-6% range, it is a great choice.
The company's diversified business model helps manage market volatility, with a stable retail income complementing growth potential in exploration and production. Notably, Hess is actively reducing its debt burden, enhancing financial stability.
Investors may consider Diamondback Energy (FANG) for its strong position in the Permian Basin, a key U.S. oil region. FANG boasts a robust production profile, efficient operations, and a focus on cost discipline.
The company's solid financials, including low debt levels, enhance its resilience in volatile energy markets. Diamondback's strategic acquisitions and technological advancements contribute to long-term growth potential.
Occidental Petroleum Corporation
For income-oriented investors, Occidental Petroleum Corporation (OXY) presents an enticing option within the energy sector. With a dividend yield of 1.28%, OXY stands out for being the most risk fee stock to invest on.
The company exhibits signs of positive EPS growth, and analysts foresee future expansion in the 4-7% range, offering a compelling total return package when combined with its attractive dividend. OXY's diversified portfolio helps mitigate market volatility.
Why consider HPK for investment? Firstly, the company boasts an annual dividend yield of 0.69%. Moreover, HPK has a consistent 23-year history of dividend payments, with a commitment to annual increases, reflecting a dedication to shareholder rewards.
This company works mainly in the Eagle Ford Shale, which keeps production and cash flow steady, supporting reliable dividends. But, be cautious, the payout ratio is high at 112.2%, making some worry about how sustainable the dividend is in the long run.
Valero Energy Corporation
Investing in Valero Energy Corporation (VLO) is attractive for several reasons. As one of the largest independent refining companies globally, Valero's integrated refining operations provide flexibility in processing various crude oils.
With a downstream focus on refining and marketing, Valero is well-positioned to benefit from refining margins and demand for refined products, offering resilience during oil price fluctuations.
BP offers an attractive 4.99% annual dividend yield, outperforming the S&P 500 average. With a 69-year history of dividend payments and 10% annual growth in the past 29 years, it demonstrates commitment to shareholders.
Operating in the stable energy transportation sector ensures consistent cash flow. However, a high payout ratio of 234.83% raises concerns about the sustainability of the dividend. Moderate EPS growth of 4-6% may not appeal to those seeking high capital appreciation.
Halliburton is the world's second-largest oilfield services company, giving it significant scale and access to a diverse range of projects. Its substantial scale grants access to diverse projects, contributing to stable revenue and earnings.
While offering a respectable dividend yield of 1.92%, Halliburton has demonstrated a 12-year consecutive dividend increase history, making it an appealing choice for income investors. Additionally, it also has a presence in high-growth markets like the Middle East and Latin America.