Top 10 Oil Stocks To Buy

Occidental Petroleum Corporation (NYSE:OXY), Schlumberger Limited (NYSE:SLB), Chesapeake Energy Corporation (NYSE:CHK), and Exxon Mobil Corporation (NYSE:XOM) are some oil stocks that hedge funds are piling into.

In the current market, crude oil stocks might be volatile but several of them have remained to be some of the most profitable companies in the world and have decent shareholder returns. Some of the crude oil stocks that investors need to look out for are Exxon Mobil Corporation (NYSE:XOM), Occidental Petroleum Corporation (NYSE:OXY), and Schlumberger Limited (NYSE:SLB).

We analyzed the global crude oil market and chose the best stocks to buy, keeping their hedge fund sentiment as the most important metric and taking the analyst ratings around each stock into consideration. Most of the companies on the list have strong balance sheets and have maintained good profitability over the years. Moreover, their capital returns have also remained healthy.

\"Energy stocks have performed well as management teams have shifted to returning cash to shareholders,\" says Rob Thummel, senior portfolio manager at TortoiseEcofin. \"We expect capital discipline to remain in place so capital expenditures and production growth will remain low while dividends and stock buybacks will grow.\"

Marathon Petroleum is an independent oil and gas refiner focused primarily on the U.S. Midwest, West Coast and Gulf Coast regions. It refines crude oil and other feedstocks, purchases ethanol and refined products for resale, and distributes the products using barges, terminals and trucks owned or operated by the company. Its Speedway retail business segment sells transportation fuels through more than 2,700 stores. The company also owns and operates crude oil and refined product pipelines.

In this article, we look at the 12 best oil stocks to buy according to hedge funds. If you want to skip the detailed analysis about the oil industry, go directly to 5 best oil stocks to buy according to hedge funds.

We used the latest holdings of The Energy Select Sector SPDR Fund (XLE) to short list oil stocks and then ranked these stocks using Insider Monkey's proprietary hedge fund sentiment data. Here are the 12 best oil stocks to buy according to hedge funds.

While it's far too soon to bail out on the energy trade (opens in new tab), it's probably fair to say that the easiest of money has already been made. With that in mind, it seemed like a good time to see which S&P 500 exploration and production oil stocks get the highest recommendations from industry analysts.

Below please find Wall Street's three highest rated oil stocks to buy now. (Stocks are listed in reverse order of analysts' consensus recommendations, from lowest to highest conviction. Ratings and market data are as of Nov. 28.)

Of 30 analysts issuing opinions on FANG, 15 rate it at Strong Buy, 11 say Buy, two call it a Hold and two say sell. That sort of conviction solidifies Diamondback Energy's status as one of the best oil stocks to buy now.

And, like many of the best oil stocks to buy now, COP shares still look relatively cheap. Uncertainty regarding the future course of oil prices has COP stock changing hands at just 9.2 times analysts' 2023 earnings per share (EPS) estimate. That's quite a bargain when compared against the stock's five-year average of 21.2 times projected EPS, per Refinitiv Stock Report Plus.

Additionally, Shell is one of the oil stocks with the best value. It has a low P/E ratio of 4.64, as well as a 3.73% dividend yield. Cash on hand equates to $35.98 billion, a reasonably large sum for a stock valued at roughly $191 billion.

It has had a mixed performance in quarterly earnings reports over the last year, but the stock has seen continued momentum nonetheless. It has one of the highest levels of insider ownership from these picks at 75.95%, trades at a P/E multiple of 7.83 and has a dividend of 2.28%. However, the stock has an ex-dividend date of Dec. 1, meaning dividends will be paused on stocks purchased as of that date.

Energy sector stocks come from companies focused on the production and supply of energy products to the rest of the economy. They can also include companies providing services and equipment to energy producers. Some of the top categories for energy stocks include:

Possible rebound after a recession. The energy sector struggled throughout the Covid-19 pandemic, due to less travel and overall demand. Now that the world is beginning to reopen, there could be a new surge in travel, pushing up demand and prices for the best energy stocks.

A volatile market. Energy prices can swing widely and rapidly, depending on the state of the global economy. For example, over the past 10 years the price of crude oil has gone from as high as nearly $110 a barrel to as low as less than $20 a barrel at the start of the Covid-19 pandemic. The value of energy stocks tends to track energy prices, making these investments more volatile and potentially riskier than stocks in other sectors.

Recently energy stocks have the highest dividend yield of any stock market sector, as well as the highest free-cash flow. These two statistics are connected: Companies that generate a lot of cash flow can spend a lot on dividends.

Some energy stocks are a good bet during a recession, but not all energy companies do well in a downturn. Utility stocks that distribute electricity and natural gas have steady revenues and cash flow, making them great stocks to own during a recession.

With the prospect of higher oil prices, we asked some of our energy contributors what oil stocks they believe are best positioned to capitalize following OPEC's bold move. Here's why they think Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), and Devon Energy (NYSE: DVN) stand out as the top oil stocks to buy following OPEC's latest attempt to influence the oil market.

10 stocks we like better than ChevronWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

Matthew DiLallo has no position in any of the stocks mentioned. Neha Chamaria has no position in any of the stocks mentioned. Reuben Gregg Brewer has positions in TotalEnergies. The Motley Fool has positions in and recommends BP. The Motley Fool has a disclosure policy.

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The impending inflationary economy will make it more difficult for businesses of all sizes to surpass previous earnings reports, and stock prices are reflecting as much. Shares of just about every equity on the market are down year to date, which begs the question: Is now a good time to buy stocks

To be clear, there is no right or wrong answer to the question, only conclusions based on individual circumstances. Since it is impossible to predict the future and which way the market will head, investors must first determine their investment strategy and time horizon; then, and only then, will they be able to determine if now is a good time to buy stocks.

Some of the best stocks to buy in the past have been the high-growth tech companies that were perfectly comfortable burning money in the moment to realize future growth. If for nothing else, relatively low interest rates, plenty of access to credit, and the advent of global industry made trading current revenues for future growth highly profitable for companies like. For all intents and purposes, cheap and unfettered access to cash helped increase profit margins for savvy capital allocators. Companies like Amazon, for example, whose value was correlated to future cash flows, outperformed on the idea of trading low yields for a brighter future.

Atlassian does face some outside threats from massive competitors, but its suite of products have become so invaluable to so many customers that it is hard to imagine anything but a bright future. In the event Atlassian is able to expand its offerings (along with its market cap), it could easily become one of the best stocks to buy for 2023 and beyond.

One of the best stocks to invest in right now may be ServiceNow. Headquartered in Santa Clara, CA, ServiceNow is a software company that has become synonymous with the transformation of digital workflows for enterprise operations. With its proprietary cloud computing platform, ServiceNow helps companies of all sizes streamline operations, optimize processes, connect data, and accelerate innovation at scale.

While fairly insulated from recessionary pressure, ServiceNow will most likely be volatile stock over the short term. There are simply too many questions surrounding the economy to suggest otherwise. However, long-term investors should find ServiceNoe to be one of the best stocks to invest in for a prolonged period of time.

The Walt Disney Company might not only be one of the best stocks to invest in for 2022 and 2023, but it may be one of the top stocks to buy now and hold for generations. If for nothing else, Disney owns some of the most valuable intellectual property (IP) in the world and has one of the most loyal fanbases to help grow revenue for years down the road. 781b155fdc