Table of Contents Hide
- When Should I Buy Oil Stocks?
- Best Oil Company Stocks
- How Do Oil Companies Make Money?
- US Oil Company Stocks
- How to Invest in Oil Stocks Right Now?
- Venezuela Oil Company Stocks
- Oil Company Stocks Canada
- Related Articles
Oil companies are significant to the global economy. They supply the core ingredients of petrochemicals used to produce products such as plastics, rubber, fertilizer, and fuel for transportation and power. However, investing in oil company stocks can be risky due to the recurring and unstable nature of the industry. Hence, to help you identify the best oil company stocks for you, every investor should have some understanding of oil for the fact that it powers the world. Read on to learn about top oil company stocks from different countries like the US, Venezuela, and Canada.
Investing in oil stocks gives investors and producers a range of unique tax benefits. This includes the gasoline that powers our cars, diesel fuel that’s crucial in the trucking industry, and jet fuel required for air travel. Oil is also necessary to heat and cool our homes as well as power factories. This is why extra care should be taken when choosing the right oil company stock to invest in, but it should also give investors comfort that the world is still some time away from doing away with fossil fuel and natural gas-based energy sources.
When Should I Buy Oil Stocks?
It’s generally better to buy oil stocks when oil prices are low and expected to rise rather than when they are already high. However, the price of oil affects different types of oil stocks in different ways. Checking out the recent price of oil is a critical first step in oil investing.
Best Oil Company Stocks
Due to the pandemic and the Russia-Ukraine war, there has been interference in the oil market. However, there has been a recovery as oil prices have been making a strong comeback. Also, the oil sector has a reputation for instability, which is why investors want oil companies to be disciplined about production. Nevertheless, as an investor, if you want to take a risk by buying oil company stocks, these are the best examples of oil company stocks to invest in.
Best Oil Company Stocks: Examples
Investors need to be careful when choosing oil stocks. That is to say, they need to focus on companies that can survive rough patches since they will be in a better position to thrive when markets turn healthy again.
#1. Occidental Petroleum Corporation
With a market cap of $54 billion, Occidental Petroleum is in a different class than the larger names below. Despite this, it has been the stock to own over the last year, even in a sector where most stocks went upwards. This is because the company has the backing of the “Oracle of Omaha,” himself, Warren Buffett. For those unaware, he is known in financial circles as the greatest investor of all time.
#2. Shell Plc
Shell is an international energy company with locations in 70 countries involved in the exploration, production, refining, and marketing of oil and natural gas, as well as the manufacturing and marketing of chemicals. Recognized globally due to its familiar red and yellow logo, Shell is one of the most experienced companies in the oil industry, and it’s reasonable to assume it will retain its leadership position in Europe. 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.
Enbridge operates one of the biggest oil pipeline systems in the world. It transports 30% of the oil produced in North America. Enbridge also has an extensive natural gas pipeline system, a natural gas utility business, and renewable energy operations. Enbridge also has made significant investments in recent years in infrastructure geared toward cleaner energy. This includes natural gas pipelines, offshore wind energy in Europe, and hydrogen.
Exxon Mobil explores, produces, trades, transports, and sells oil and natural gas. An industry leader in the energy and chemical manufacturing sectors, it operates facilities or markets products globally and explores oil and natural gas on six continents. ExxonMobil markets fuels, lubricants, and chemicals under four brands: Esso, Exxon, Mobil, and ExxonMobil.
The company has significantly lowered its oil production costs over the past couple of years by focusing on its highest-return assets while also taking steps to better leverage its massive scale, enabling it to generate lots of cash flow when oil prices are much higher.
Chevron is an integrated oil company with upstream and downstream operations. The upstream division is involved in the exploration and production of oil and natural gas, while downstream operations cover refining, transportation, and marketing. Chevron is also involved in chemical and mining operations as well as non-energy activities such as technology development.
How Do Oil Companies Make Money?
Oil service firms make money when a high demand for crude oil drives exploration and production. Refiners make money when the demand for fuel and value-added petroleum products is high, and they don’t mind when the price of crude goes lower.
US Oil Company Stocks
In the United States, companies produce crude oil on private and public land and offshore waters. Most of these companies are independent producers, and they usually operate only in the United States. The other companies, often known as “major oil companies,” have hundreds or thousands of employees and operate in many countries. Also, there’s no specific body or policy that regulates the oil and gas industry in the U.S. However, federal, state, and local governments each regulate various aspects of oil and gas operations.
Examples of US Oil Company Stock
Below are examples of US oil company stock suitable for you,
#1. Exxon Mobil Corporation (XOM)
Exxon is the largest oil and gas company in the U.S. by total revenue. It reported $19.66 billion in net income for the quarter ending Sept. 30, breaking last quarter’s record for the largest quarterly profit in over seven years. Following a drastic drop in 2020 due to pandemic-induced declines in demand for oil, Exxon has retraced its steps to a valuation the stock hasn’t seen since 2014. Just recently, Exxon surpassed these levels to reach a new all-time high.
#2. Marathon Petroleum Corporation (MPC)
Marathon Petroleum is the largest oil refiner in the U.S. Roughly 2.9 billion barrels of oil are refined every day. On top of its refining business, MPC has taken control of separate distribution channels. It owns Speedway, the second-largest convenience store chain in the country. Speedway operates more than 3,900 stores nationwide, with a presence in 36 states. It has beaten analyst estimates for more than four quarters and also offers a 2% dividend yield.
#3. Devon Energy
Devon Energy is a U.S.-focused E&P company. It has diversified operations across several low-cost, oil-rich basins. The company’s diversification enables it to produce lots of low-cost oil and natural gas, which allows it to generate plenty of cash. The company launched an industry-first, fixed-plus-variable dividend framework in 2021. Also, it pays out as much as 50% of its excess cash flow each quarter via variable dividend payments after funding its fixed base dividend and capital expenses. Devon uses the rest of its excess cash to strengthen its balance sheet and repurchase shares.
#4. Phillips 66
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 0.2%). Its marketing and specialty businesses distribute refined products and manufacture specialty products such as lubricants. Phillips 66 also boasts a strong financial profile, which includes an investment-grade balance sheet with very manageable debt.
#5. Halliburton Co. (HAL)
Another leading U.S. oil field services company pursuing growth in the international market is Halliburton, which provides services including drilling and pressure pumping. Its completion and production division delivers cementing, stimulation, intervention, pressure control, specialty chemicals, and completion services. Halliburton’s drilling and evaluation unit offers field and reservoir modeling, drilling, evaluation, and wellbore placement solutions for well-construction activities.
How to Invest in Oil Stocks Right Now?
You can invest in oil by buying energy ETFs and mutual funds, investing in MLPS, buying stock in an oil and gas company, or trading oil options and futures.
Venezuela Oil Company Stocks
The Venezuelan government plans to nationalize its oil and gas assets due to the administration of United States sanctions on Venezuela. Nationalizing the asset reduces the capital expenditure of foreign oil companies, resulting in a decrease in crude oil production from the country during the forecast period. Also, decreased crude oil production due to lower capital investment is expected to restrict the market’s growth during the forecast period. Nevertheless, the top Venezuela oil company stocks have massive potential for hydrocarbon resources.
List of Top Oil Company Stocks Company in Venezuela
Below are the top oil company in Venezuela with good stocks,
- Petroleos de Venezuela SA. (PDVSA)
- Cardon IV, S.A. — Venezuela
- Cementaciones Petroleras Venezolanas S.A. Cpven — Venezuela
- Consorcio La Perla, — Venezuela
- Ineparia, Inc. — Venezuela
- PDVSA Baripetrol, — Venezuela
- PetroBicentenario — Venezuela
In addition, Venezuela has the possibility of foreign player involvement and participation in oil company stocks and gas exploitation in the near future.
Oil Company Stocks Canada
Canada is known for its abundance of natural resources, and the oil sector is definitely one of the primary sectors driving the Canadian economy. As such, there are many options for investors when it comes to energy stocks. If you invest in oil company stocks in Canada, it’s important you understand the energy sector and what the company’s business is. Some industries are dependent on others.
Oil Company Stocks in Canada: Examples
This list of the best oil company stocks is headquartered in Canada but trades on US stock exchanges, making it easy to invest in Canadian oil even if you live in the US. This is also meant to help you conduct your own research to find the best oil stocks to buy right now.
#1. Canadian Natural Resources
Canadian natural resources is a Calgary-based oil and natural gas company. It has quickly become the biggest oil company in Canada. In fact, in April 2022, it became the first TSX-listed oil and gas company to surpass a $100 billion market capitalization. It’s the largest producer of natural gas and crude oil in Western Canada, and its ability to keep operating costs low while increasing production has helped it post strong revenues.
Suncor is a major oil company stocks in Canada that focuses on both upstream oil production and refinement and downstream retail and sales through its Petro-Canada gas stations. It’s the world’s largest producer of bitumen, which is a byproduct of crude oil used in asphalt and roofing tiles. It also has operations in the oil sands of Alberta and refineries in eastern Canada and Colorado. The company had to cut its dividends, which displeased investors, who then sold Suncor stock. Though the company has done a good job buying back stocks and raising dividends, Suncor still trades at a relatively low price. This could be a good opportunity for value investors on the hunt for a deal.
#3. Cenovus Energy
The company’s headquarters are located in Calgary, Canada. Cenovus is an integrated oil and natural gas company engaged in the development, production, and marketing of crude oil, natural gas liquids, and natural gas in Canada, the U.S., and the Asia Pacific region. It also refines crude oil and transports and sells refined petroleum and chemical
#4. Imperial Oil
Imperial Oil was incorporated in 1880 and is headquartered in Calgary, Canada. It is an integrated company engaged in the exploration and production of crude oil and natural gas. It’s also involved in the production, refining, transportation, and sale of crude oil and natural gas products. Its distribution system moves petroleum products to market by tanker, truck, rail, and pipeline. In addition, the company manufactures and markets various petrochemicals. Imperial Oil is a subsidiary of ExxonMobil.
#5. Cenovus Energy
Established in 2009. The company’s headquarters are located in Calgary, Canada. Cenovus is an integrated oil and natural gas company engaged in the development, production, and marketing of crude oil, natural gas liquids, and natural gas in Canada, the U.S., and the Asia Pacific region. It also refines crude oil and transports and sells refined petroleum and chemical products.
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