Top Oil & Gas Stocks for Q2 2023
The oil giant bought $142 million worth of shares during the second quarter, and declared a quarterly base-plus-variable dividend of $1.84 per share. This includes a $1.25 base dividend and a 59 cents per share variable dividend. This dividend indicates a total annualized dividend trade99 review yield of approximately 3.3% for PXD. Annual inflation in the U.S. hit a 40-year high, 7.5% in January 2022. Large corporations have chosen the route to pass rising costs onto consumers. Higher oil prices are great for oil companies, but not for the average, everyday consumer.
If the company manages to keep its quarterly profits flowing, the upward momentum of its stock should continue as well. The fund, which yields 9.3% and trades at a deep 12.7% discount to net asset value (NAV, or the value of the stocks in its portfolio), is run by Kayne Anderson, a 38-year-old cornerstone of the energy-investing world. Moreover, KYN has managed to grow its dividend right through the COVID-19 crisis, successfully converting oil-price gains to rich payouts for investors.
- As the refining and marketing component of the energy supply chain, downstream firms convert fossil fuels into usable consumer products such as gasoline.
- More importantly, oil prices have risen steadily since the start of the pandemic in 2020.
- “We are somewhat surprised by the timing of this deal, coming so soon after closing the Parsley acquisition [in January], but we think PXD is being opportunistic.”
- And to be clear, XOM has still not recovered to its price point just before the coronavirus ruined everything.
- 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.
A low P/E ratio shows that you’re paying less for each dollar of profit generated. Profit can be returned to shareholders in the form of dividends and share buybacks. When energy prices go up, energy companies can reap the benefits, like by earning significantly more per barrel of oil, even though their costs stay about the same. This temporary framework is a chance for them to pay higher dividends to investors or to invest for future growth. ExxonMobil has been aggressively spending to finance long-term energy production. While this temporarily hurt its cash flow and led to a cut to its bond rating in 2020, it’s banking on future oil prices rising for these investments to pay off.
The EOG in the company’s name once stood for “Enron Oil & Gas Company,” as it was formerly a major operating unit of the failed energy conglomerate, Enron. PetroChina, based in Beijing, is the largest producer and distributor of oil and gas in China and Asia on the whole. The company was the first Chinese stock that Warren Buffett ever bought for Berkshire Hathaway, due to the company’s giant reserves, financial strength and opportunity within the growing Chinese economy. EOG is another of the Strong Buy-rated energy stocks featured here, thanks to 12 Buys and just four Holds among analysts who have released notes over the past three months. Check out other analysts’ price targets and analysis for EOG at TipRanks.
Enbridge has made significant investments in recent years on infrastructure geared toward cleaner energy. This includes natural gas pipelines, offshore wind energy in Europe, and hydrogen. These investments position Enbridge for the future of energy even as it remains vital to supporting the oil market’s current needs.
Formerly known as AEX Minerals Corporation, CNQ has gone by its current moniker since 1975, a mere two years after its 1973 incorporation. Neal Dingmann, Truist’s top-rated analyst, is bullish on the stock, with a Buy rating and a price target of $151. “ConocoPhillips’s growth for the foreseeable future is tied to unconventional, which comes primarily from the Permian, distantly followed by the Eagle Ford, and Montney,” Dingmann writes in a note. “The company also has attractive assets in Alaska, which could add additional growth. We rate the shares Buy given the dividend we believe sustainable and strong FCF yield.” The company continued to generate strong free cash flows of $1.0 billion in Q2. In addition, EOG declared a quarterly dividend of 82.5 cents per share, and bought back 2.8 million shares over the three-month period.
- That’s huge, and when combined with the oil stock’s latest share repurchase program, could translate into solid returns for shareholders.
- It also has investments in midstream operations and in petrochemicals via its CPChem joint venture with Chevron (CVX 1.75%).
- The oil company established the industry’s first fixed-plus-variable dividend framework a few years ago.
- In addition to hiking its dividend, BP has been buying back stock with a vengeance, recently announcing that it is boosting its share buybacks by $2.5 billion to further reward shareholders.
- Energy stocks have great potential during periods of economic growth.
Its products are used by upstream, midstream and downstream sectors in the oil and gas industry. If you value growth in your portfolio, consider buying great energy stocks at some point. There will always be a keen demand for energy all around the world. Devon’s stock price is currently more than 40% below its 52-week high despite the recent surge in crude prices. That makes buybacks a very attractive use of its excess free cash flow.
Motley Fool Investing Philosophy
Shares of SLB are up nearly 60% over the past year, driven by higher oil prices and solid quarterly results. The energy sector finished the year up nearly 60% – easily outperforming the broader equities market. Exxon is maintaining its commitment to returning value to shareholders as fxtm review well. It intends to buy back $10 billion worth of stock, and also raised its dividend, tacking on another year in its 39-year run of increasing the payout. These are just some of the reasons ExxonMobil is my top oil stock to buy now, and one to consider owning for the long haul.
The oil giant believes this spending should help lower carbon and deliver higher returns in the coming years, which should eventually help it return more cash to shareholders through dividends and share repurchases. They are currently the second largest oil and gas company in the United States. Chevron is also a descendent of John D. Rockefeller’s Standard Oil. During the pandemic, inflationary pressures caused the commodity market to soar. From steel, to lumber, to plastic, to oil and natural gas, prices have risen almost anywhere you look.
Risks of Investing in Energy Stocks
Should the economic recovery thesis win out over the market crash forecast, you may find it to be one of your favorites too. Falling between the upstream and downstream stages, midstream primarily refers to the processing, storage and transportation of fossil fuels. While all stages of the energy supply chain are critical, midstream operators leverage considerable influence on the economy because they ultimately transport fuel to regional distributors.
In fact, SUN is currently the largest producer as well as the largest consumer of hydrogen in all of Canada. Recently, the company acquired Carbon Engineering for $1.1 billion. Carbon Engineering is focused on the deployment of large-scale Direct Air Capture technology. Using this, carbon dioxide can be captured and used to produce clean, affordable transportation fuels. Now, with fears of recession declining and with production cuts by OPEC and its allies, oil is in recovery mode. The potential end to monetary tightening is also likely to support oil and Brent is back to $87 per barrel.
Crude could keep rebounding as those barrels start coming off the market next month. During the fourth quarter of 2021, ConocoPhillips reduced debt liabilities by $12.9 billion. In addition, they achieved a 14% Return on Capital (ROC), generated $17 billion in cash from operations, while returning $6 billion to shareholders. Wirth told analysts “We are relatively less affected, I think, than most others in the industry.” In terms of its stock, Suncor Energy’s share price is up 17% in the past 12 months and is currently trading at $30 per share. It has a thrifty P/E ratio of 7.5 and a solid dividend that yields 4.8% or 38 cents a share per quarter.
Specifically, Devon paid 86 cents per share in its fiscal 2013 but has already paid $1.61 so far in 2023 with half the year left to go. Sure, overall payouts are likely to be well under the $5.17 paid in 2022, but the trend is higher when measured in several years instead of several quarters, which is a good sign for long-term income investors. This has created a strong tailwind for payouts lately, including a total distribution of $25.44 per share in 2022—almost four times the $6.83 it paid the year prior. CNQ has outperformed the market handily over the last five years, delivering total returns of more than 80%. First and foremost, Borr has a robust order backlog of $1.64 billion. Recently, the company won new orders worth $211 million and the order book has swelled to almost $1.9 billion.
EOG Resources (EOG, $133.39) is an American company engaged in the exploration, development, production and marketing of crude oil, natural gas and natural gas liquids (NGLs). The firm has reserves in the U.S. and Trinidad, and as of Dec. 31, 2021, it had net proved reserves of 3.7 million barrels of oil equivalent (MMboe). These reserves were made up of 41% crude oil and condensate, 22% NGLs and 37% natural gas. Exxon Mobil is currently the largest oil and gas corporation in the United States. It is the largest descendant of John D. Rockefeller’s Standard Oil.
Top Oil Stocks to Buy on OPEC’s Latest Move
Moreover, SLB’s board of directors approved a 43% increase to its quarterly cash dividend, now paying out 25 cents per share. As such, investors would be wise to keep a close eye on energy stocks moving forward. Chevron also offers a fairly generous 3.9% dividend yield and an over three-decade long history of annual dividend increases, making it a Dividend Aristocrat. It hasn’t managed through every up and down in the oil sector as well as it has this last one, but it has proven again and again that dividend investors are a top priority.