The oil market has seen a significant transformation in recent times, making it an attractive investment option. Two key factors contributing to this transformation are the extended oil output cuts by OPEC+ and the shifting priorities of energy companies. This article explores some of the most promising oil stocks to consider for investment.
One of the top picks is Chevron (NYSE: CVX), a vertically integrated oil and gas company with operations throughout the energy value chain. Despite not being the flashiest option, Chevron offers stability with a strong balance sheet, consistent revenue growth, and commendable net margins. The company also has a track record of dividend increases and offers a forward yield of 3.62%. Market analysts recommend Chevron as a moderate buy with a price target of $192.92, indicating potential upside of nearly 16%.
Enbridge (NYSE: ENB), a multinational pipeline and energy company, is another stock to consider. Although it has faced challenges in the market, demand dynamics suggest a potential uptick. Enbridge boasts a healthy operating margin and has maintained profitability over the past decade. It offers a forward dividend yield of 7.55%, although potential investors should consider the high payout ratio. Analysts have a moderate buy recommendation for Enbridge, with a price target of $40.92, suggesting a possible 17% upside.
Phillips 66 (NYSE: PSX) is a midstream and downstream company that stands to benefit from an increase in roadway traffic as communities recover from the pandemic. With a firm financial footing, competitive valuation, and a forward dividend yield of 3.51%, Phillips 66 is an attractive option for value hunters. Analysts project a price target of $131.64, indicating a potential 7.5% upside.
Schlumberger (NYSE: SLB), the world’s premier offshore drilling company, has seen a shift in sentiment with a noticeable uptrend in recent months. Despite its wobbly financials, Schlumberger’s services are in high demand due to a revived thirst for oil. With a forward earnings multiple of 16.65x, a low payout ratio, and a strong buy recommendation from analysts, Schlumberger presents an opportunity for investors with a price target of $67.91, suggesting potential upside of over 12%.
Northern Oil and Gas (NYSE: NOG), specializing in exploration and production, is well-positioned to cater to the heightened demand for oil and natural gas. The company focuses on premier basins across the U.S. Market conditions have improved since July, making Northern Oil an attractive option among stocks to buy now.
Overall, these oil stocks offer stability, growth potential, and attractive dividend yields, making them worthy of consideration for investors looking to capitalize on the resurgence of the hydrocarbon energy market.
– OPEC: The Organization of the Petroleum Exporting Countries, responsible for coordinating and unifying the petroleum policies of its member countries.
– OPEC+: An alliance between OPEC and non-OPEC oil-producing countries.
– Hydrocarbon: A compound made up of hydrogen and carbon atoms, such as oil or natural gas.
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– Chevron Investor Relations
– Enbridge Investor Relations
– Phillips 66 Investor Relations
– Schlumberger Investor Relations
– Northern Oil and Gas Investor Relations