Oil and Gas Stocks- What are the best oil and gas stocks to buy right now? Oil and gas prices have risen dramatically as a result of the Russia-Ukraine conflict.
This year, the energy industry is the only one with significant improvements.
Only one S&P 500 sector has seen significant gains so far this year, as of May 24: energy. And it’s increased a lot, more than 50%, compared to the only other green industry, utilities, which is up roughly 2%. The out performance of the energy industry is attributable to supply not keeping up with demand. Prices plummeted as a result of the epidemic, and oil and gas corporations pumped less. Some even closed their doors. [ Oil and Gas Stocks ]
As the world recovered from the pandemic, prices began to rise again, but investors were more interested in corporations paying down debt, buying back shares, or increasing dividends than in new exploration. Domestically, oil and gas businesses are digging for more fossil fuels, especially since the conflict in Ukraine has pushed up already high costs. Here are seven of the best oil and gas stocks to examine since prices are expected to remain high for some time.
Civitas Resources Inc. ( Code : CIVI)
The high pricing environment for oil and gas, according to Benjamin Halliburton, chief investment officer of Building Benjamins, will persist at least a couple of years. “Sanctions on Russia will remain in place long after the war is over,” he warns. “Field planning and development takes years.
Drilling is hampered by an unfavorable regulatory environment for both drilling and pipelines, which increases costs.” Civitas is one stock he sees heading higher against this backdrop. The company’s shares could approach $110 next year, and its annual dividend payout could hit $6, thanks to a robust balance sheet and expanding free cash flow. The stock finished at $69.13 on May 24. Halliburton describes the stock as “very inexpensive.” [ Oil and Gas Stocks ]
Ovintiv Inc. (Code :OVV)
Ovintiv, a firm with a portfolio of properties in various U.S. states and Canada, is another company Halliburton loves. It has assets in the Anadarko Basin in Oklahoma, the Permian Basin in Texas, and the Montney formation in western Canada. From this year’s focus on debt repayment, Halliburton anticipates its free cash flow to be redirected to dividends next year.
According to him, the company’s yearly dividend distribution may grow from $3.20 to $3.60 if it happens. His estimate of the stock’s fair value is $90 per share. On May 24, the company’s stock closed at $48.92. [ Oil and Gas Stocks ]
Chesapeake Energy Corp. (Code :CHK)
In its fiscal year 2022, this oil and gas business intends to produce the equivalent of 670 million to 690 million barrels of oil from shale plays in Pennsylvania, Louisiana, and Texas. “CHK is virtually transformed into a new firm with all-new management and a healthy balance sheet as a result of bankruptcy restructuring,” Halliburton said. “Free cash is on the rise and can be used to pay dividends.”
He forecasts a $5.75 annual dividend distribution in 2023, and a fair value of $100 for the shares. It closed at $97.87 on May 24. “Limited upside,” Halliburton argues, “but a large yield and low risk.” [ Oil and Gas Stocks ]
Occidental Petroleum Corp. (Code :OXY)
Oil and natural gas prices will eventually fall as high costs depress demand for fossil-fuel-generated energy and rising production balances supply and demand. According to Uri Gruenbaum, CEO of TipRanks, “slowing economic development in China and potentially severe laws to boost sustainable energy could affect future oil prices.” “A rate hike could potentially have an impact on the sector.”
Some, on the other hand, are more upbeat, leaving analysts with conflicting feelings about popular oil equities, he claims. Warren Buffett’s recent purchase of even more Occidental Petroleum stock could help the positive case. Berkshire Hathaway Inc. (BRK.A, BRK.B), his company, now owns more than 15% of the company. On TipRanks, 20 Wall Street analysts have given OXY a 12-month price objective of $70.11. The stock closed at $65.07 on May 24. [ Oil and Gas Stocks ]
Chevron Corp. (Code :CVX)
Berkshire Hathaway has been buying Chevron stock recently, increasing its holding in the oil and gas giant to more than 8%. “Buffett is known for his long-term vision,” Gruenbaum says, “and his moves in the oil and gas sector could signal an optimistic prognosis.” “Despite substantial 12-month gains, analysts’ price estimates for energy companies imply space for growth in the coming months.”
As of May 24, a TipRanks consensus of analysts recommended 15 “buy” recommendations, nine “hold” recommendations, and one “sell” recommendation for Chevron. The average price target over the next 12 months is $172.56. The stock finished at $172.64 on May 24. [ Oil and Gas Stocks ]
ConocoPhillips (Code :COP)
According to the TipRanks analyst consensus, ConocoPhillips is a large oil and gas firm with more potential upside than Chevron. As of May 24, the average 12-month price objective among 14 analysts was $128.77, according to the consensus. That day, the stock closed at $109.48, implying a gain of more than 17% if the goal price is met.
Twelve analysts recommend buying the stock, while two recommend holding it. According to the company’s first-quarter report, it expects to produce 1.76 million barrels of oil equivalent per day in 2022. [ Oil and Gas Stocks in canada]
Targa Resources Corp. (Code :TRGP)
Targa was rated as a buy by all 12 analysts in a TipRanks consensus as of May 24. Their average 12-month price objective is $90.75 per share, which is more than 31% higher than the closing price of $68.97 on that day. Targa is an infrastructure business that provides midstream services rather than producing oil and natural gas.
It collects natural gas and crude oil from production locations and sells the commodities to market customers. It also claims to have a dominant position in a Texas natural gas liquids hub. [ Oil and Gas Stocks to buy ]
7 best oil and gas stocks to buy now:
- Civitas Resources Inc. (CIVI)
- Ovintiv Inc. (OVV)
- Chesapeake Energy Corp. (CHK)
- Occidental Petroleum Corp. (OXY)
- Chevron Corp. (CVX)
- ConocoPhillips (COP)
- Targa Resources Corp. (TRGP)
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