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best oil stocks to buy 2022

Oil stocks seem to be one of the most promising sectors to deliver returns in the final quarter of 2023. Occidental is one oil stock that many added to their watchlist starting in 2022, when the “Oracle of Omaha” himself, Warren Buffett, began loading up shares for his company Berkshire Hathaway. For those unaware, Buffett is renowned in financial circles as the greatest investor of all time. The company’s superior strategy is paying off, and investors are seeing the rewards.

These offers do not represent all available deposit, investment, loan or credit products. We saw how quickly the industry can change after many oil companies went under in 2020, only for industry profits to soar in 2021 and this year. However, the firm has operations in 14 countries worldwide, giving it a unique position to scale.

The company has proved natural gas, oil, and NGL reserves of 21,148 billion cubic feet of natural gas equivalent. Southwestern Energy is committed to maximizing value for shareholders through a focus on operational excellence and a disciplined approach to capital allocation. SWN was incorporated in 1929 and is headquartered in Spring, Texas. All five of these companies are major players in the oil industry, with a strong track record of success and a proven ability to weather market downturns. While they may be trading at a lower price point currently, these stocks have the potential to deliver impressive returns for investors who are willing to take a chance on them.

But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional. This statement remains true even as renewable energy sources are becoming cost competitive with oil. The simple fact is that the world will still be using oil for the near future. Every investor should have some exposure to oil for the simple reason that it powers the world.

His total investment now stands at 188.4 million shares, or 20.2% of the company, worth $11.3 billion. Another great attribute of XOM stock is that it is a Dividend Aristocrat. Specifically, ExxonMobil has increased its dividend payout to shareholders for 39 consecutive years. The company currently pays a quarterly dividend of 91 cents per share, and its yield stands at 3.3%.

Stocks (million barrels)

The following nine oil stocks have demonstrated the ability to weather the storm of declining energy prices. They have delivered underlying value to shareholders via sustained dividends, and their scale can help them thrive when navigating the ups and downs of constantly fluctuating crude prices. Additionally, investors must consider the implications of climate change on the long-term prospects of oil and gas.

best oil stocks to buy 2022

Overall, this stock doesn’t look very attractive from a technical viewpoint. Vaalco is committed to maximizing value for shareholders through a focus on operational excellence and disciplined capital allocation. The company is based in Houston, Texas, and was incorporated in 1985.

Best Stocks Of 2022: Oil Stocks And Medicals Shine

Here are some of the top oil stock picks that could continue to perform well for the rest of 2023. Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear).

As a result, ConocoPhillips generated over $10 billion in FCF while returning $6 billion to shareholders. Top 5 Small-Cap Oil Stocks in 2022 – 4The oil and gas industry is one of the most polarizing markets in the world. Canadian oil and gas stocks have faced a rollercoaster ride over the past few years.

Some signs a bullish momentum may be picking up again can only be seen if the price manages to trade above its 200-day moving average again. We’ll have a look at the best cheap oil stocks under $5 to buy in 2022 and 2023. In the process, we’ll consider each company’s stock profile, technical view, and fundamental analysis. In the conclusion, we’ll evaluate the forward view of the energy industry as a whole. For example, when the Covid-19 pandemic caused millions of offices and businesses to close, it had a devastating effect on the oil and gas sector. In fact, at one point, the futures contract for a barrel of oil turned negative.

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Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers. 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.

  • The company was founded in 1926 as Panhandle Oil and Gas and changed its name in 2020 to PHX Minerals.
  • A small-cap stock is considered any stock with a market capitalization between $300 million and $2 billion.
  • The company’s superior strategy is paying off, and investors are seeing the rewards.
  • Partnerships are not a recommendation for you to invest with any one company.

OXY went from a net loss of $346 million in the first quarter of 2021 to net income of $3.53 billion in the second quarter of 2022. This radical increase boosted OXY’s valuation considerably, but the stock still sits at an attractive price-to-earnings ratio of 6.75. The energy sector is one of three (along with materials and health care) for which analysts expect earnings per share to decline next year.

Investing in Top Oil Stocks

Calgary-based Suncor is an integrated energy company, extracting crude from Canada’s oil sands in addition to offshore drilling, refining, transportation and marketing businesses. 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. This means that when oil prices dip, the margins at companies like Suncor are hit much harder as a result.

best oil stocks to buy 2022

And Canada, that collectively adds up to 3.2 million barrels per day. The company also owns 12 ethanol plants that crank out 1.6 billion gallons of the biofuel on top of that. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. They also supply the core ingredients of petrochemicals used to make products such as plastics, rubber, and fertilizer. Suncor is one of Canada’s largest companies focusing on developing one of the largest petroleum resource basins in the world. ESG investors should take note of the company’s excellent sustainability track record.

Are oil and gas companies a good investment?

A company’s free cash flow (FCF) is its remaining cash flow after capital expenditures. This is money that can be used to pay dividends, buy back shares, fund production expansion or acquisitions, or for other corporate purposes. Below is a list of large-cap energy companies expected to generate the highest levels of free cash flow to support dividends and share buybacks next year. First, let’s look at sector valuations and expectations for next year. We can partially identify global supply and demand trends through analyzing changes in petroleum inventories.

  • Look for FANG shares to continue reaping the benefits as investors flock to the more profitable, fundamentally-solid oil firm.
  • Our forecast supports the Brent crude oil price rising to the mid-$80 per barrel (b) range by the end of 2024, up from the June 2023 average of $75/b (Figure 1).
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  • So whether you’re investing in companies or funds, understand the drivers of your investment returns.

All investing carries risk, but a little bit of research can mitigate those risks and ensure you’re in an investment you believe in. We used the following criteria to build this list of the best oil stocks for 2023. Energy Transfer is a midstream energy stock that owns and operates roughly 120,000 miles of pipelines across 41 states. This business model isn’t quite as high-margin as energy exploration, where firms can increase drilling when prices are high to provide a big boost to profitability. However, it’s much more reliable as ET is basically a toll-taker that passes discoveries on to end users, such as wholesalers and refiners—and takes a cut in the process. Unlike integrated energy companies, refiners like VLO are more reliant on the “spread” between unrefined oil and higher-valued refined products.

Best Value Oil and Gas Stocks

This presents a potential buying opportunity for investors who are looking to ride oil stocks higher as we head into the New Year. Diamondback Energy (FANG) is an independent oil and natural gas company with production focused in the Permian Basin of West Texas. FANG returned 35.5% last year, which actually made it a sector laggard. Oil stocks were some of the few shining stars during the bear market of 2022. Inflation took its toll on consumer spending and business sentiment, but it did wonders for the price of crude oil.

Amid these sweeping changes, oil and gas penny stocks face added uncertainty given their small size, modest market share, and relative lack of financial resources compared to larger companies. However, the benefit of having multiple options is that investors have many options including buying shares of ETFs that add even more diversity. And because oil and gas companies are taking an increased interest in renewable energy many of the most profitable oil stocks today will continue to be good investments in the future. The Investing News Network has compiled a list of the five top Canadian oil and gas dividend stocks using TradingView’s stock screener.

At the time of writing the stock was quoting at $6.20 and was below the 50-day and 200-day moving averages. SWN price has also broken and drifted well below the support line created by two previous dips. For this stock to show a reversal of the current bear trend you would need to see a break above that line and above the 200-day moving average. When oil sells for less than, many of these companies will lose money. However, even during periods of strong growth, the price of oil is affected by seasonal events. As any driver will tell you, the price of gasoline goes up in the summer months because the amount of driving increases.

But, as travel and commerce recovered, it led to the demand for oil products recovering faster than production could respond. Investors today are weighing continued strong economic activity with the threat of a Federal Reserve-induced slowdown to fight inflation. Although each segment of the industry has a specific set of risk factors, the overall oil business is both cyclical and volatile. Oil prices might not go up forever, but right now oil is the profitable stock market play with exceptional year-to-date returns.