They run the gamut from pure-play E&Ps, midstream companies, service providers, and refiners to integrated oil majors that do a little bit of everything. Profits and losses can swing wildly based on small shifts in demand or moves by petrostates such as Saudi Arabia and Russia, whose interests can run counter to the public companies in the industry. We saw that in early 2022 after Russia’s invasion of Ukraine, which sent crude prices soaring into the triple digits for the first time in years. 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.
We have attempted to assign a value to the company using a comparable company analysis method, comparing Petrobras to its oil sector peers based on NTM EV/EBITDA, NTM P/E, and NTM P/FCF. It is worth keeping in mind that we have excluded Aramco (ARMCO) from the median calculation in both our calculations, mostly due to the fact that it is essentially not truly publicly traded and also carrying questionable multiples. Additionally, the recent collapse of the Silicon Valley Bank disturbed the equities market which also slightly affected the oil prices as they fell by around 2% on March 13. However, this seems temporary and is expected to be offset by the recovery in demand by China. Baker Hughes in its current form originated in 2017 from the merger of Baker Hughes with GE Oil & Gas. Baker Hughes’ history of oilfield innovation stretches back over a century, and with the combination with GE, the company now can offer the full spectrum of services to oil and gas companies, from upstream to downstream.
Devon Energy Corporation (NYSE:DVN)
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. Nonetheless, geopolitical tensions, continued easing of Chinese lockdowns, and/or an economic rebound could boost oil prices next year. However, it is also quite volatile which has been quite evident in recent years. According to Maximize Market Research, the industry’s market size reached $1.4 trillion in 2021 and is expected to grow to $1.6 trillion by 2029.
- It also has investments in midstream operations and in petrochemicals via its CPChem joint venture with Chevron (CVX 0.71%).
- The recent change in fortune in terms of crude oil prices made this goal more achievable than ever.
- Its share price has risen 50% to $25 in the last year as the price of crude oil has climbed.
- In addition to issues caused by international events, especially those that impede the safe transport of natural resources.
- Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
- Enbridge owns extensive midstream assets that transport hydrocarbons across the U.S. and Canada.
There are several online brokers that can help you buy stock in oil companies. 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. As it was mentioned in the previous article, the company has struggled for a long time to keep its debt levels under control. The deleveraging process that Petrobras has gone through was a long and difficult effort, but one that finally yielded respectable results. Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio.
Is it a good idea to invest in oil stocks?
The company also owns and operates a regulated natural gas utility and Canada’s largest natural gas distribution company. Finally, the firm has a small renewables portfolio primarily focused on onshore and offshore wind projects. Founded in 1888, Texas Pacific Land Trust is among the largest landowners in Texas.
Devon Energy, based in Oklahoma City, is one of the largest independent exploration and production companies in North America. The firm’s asset base is spread throughout onshore North America and includes exposure https://forexbox.info/ to the Delaware, STACK, Eagle Ford, Powder River Basin, and Bakken plays. In that sense, it is better in our view to calculate a potential investment with a more conservative payout and subsequent yield in mind.
Analyzing oil stocks
The oil and gas industry is one of the most important and lucrative sectors in the world. 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, https://bigbostrade.com/ and you should keep your eye on the oil industry even as renewable energy becomes a powerful force worldwide. The company leverages vertically integrated operations to keep the costs of these various pursuits down, a system which has worked for shareholders in recent times.
Two weeks into 2023, Chevron announced it was increasing its dividend by approximately 6%. Of the 28 analysts issuing ratings on FANG tracked by S&P Global Market Intelligence, 16 call it a Strong Buy, eight say Buy, three have it at Hold and one calls it a Sell. That works out to a consensus recommendation https://investmentsanalysis.info/ of Buy, with very high conviction. Raymond James analyst John Freeman praises EOG’s position as one of the largest producers in North America, “with established positions in every major on-shore shale play.” Nonetheless, their prospects can vary considerably because of the price of oil.
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The demand for coal-based energy is slowly declining and it is only a matter of time before the fossil fuel demand drop starts affecting crude oil. Before investing in any oil stocks, you need to find the right brokerage account for your investments. Most major online discount brokers have access to the oil company shares you’re looking for, but beware of fees and commissions. Almost all brokers are commission-free for stocks and ETFs now, and most require no minimums to open an account. Paying a flat fee on every trade is a thing of the past — if your current broker isn’t commission-free, consider finding a new one. 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.
- The Brazilian oil and gas giant has created significant shareholder value through its dividend program in the past couple of years.
- Founded in 1888, Texas Pacific Land Trust is among the largest landowners in Texas.
- Because of that, it’s best to focus on companies built to weather the sector’s inevitable downturns.
- Chevron has also boosted its share buybacks this year, lifting them to $15 billion.
- The stock’s performance in 2022 saw it jump almost 8%, which doesn’t stand out among the sea of strong performers on this list.
- However, if we are to value the company compared to the rest of the oil sector, the fair price of Petrobras would be around $24 per share.
XOM’s share price jumped more than 50% in 2022 despite the wider stock market struggling mightily. U.S. benchmark West Texas Intermediate crude oil spot prices topped out at $121.52 a barrel back in early June 2022 – and then went on to lose 45% of their value through mid-March 2023. 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.
Integrated oil companies
For context, Brent crude has traded in a 52-week range of $70.12 to $125.19 per barrel, so Goldman Sachs’ forecast represents something of a return to the “good old days” of 2022. Refiners can wind up charging less for their products than they cost to make. NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only.
NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance. 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.
EOG Resources (NYSE:EOG)
Thanks to its large-scale, vertically integrated operations, Phillips 66 is among the lowest-cost refiners in the industry. This is the result of both leveraging its integrated midstream network to obtain lowest-cost crude for refining and petrochemical feedstocks and investing in projects that give it higher margins on its products. Phillips 66 is one of the leading oil refining companies, with operations in the U.S. and Europe. It also has investments in midstream operations and in petrochemicals via its CPChem joint venture with Chevron (CVX 0.71%). Its marketing and specialties business distributes refined products and manufactures specialty products such as lubricants.