The best-performing sector last year was energy, and with good reason, given that benchmark pricing in the summer of 2022 hit levels not seen in years. While those benchmark prices have sold off big since then, they are still well above the levels needed for oil companies to make solid money. With demand from China expected to surge as the year goes on, prices should follow. The recent selling is almost all related to the current issues with the banking industry, and patient investors who have been waiting for an opportunity to buy some of the biggest and best names in the sector are getting a very welcome pullback.
We screened our 24/7 Wall Street energy research universe and found seven companies paying big and dependable dividends that are outstanding ideas for investors looking to get involved or add to existing positions. While shares of the top companies we are highlighting are Buy rated on Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
BP
This is one of the premier European integrated oil giants, and top Wall Street analysts are quite positive on the shares. BP PLC (NYSE: BP) engages in the energy business worldwide. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants. It is involved in refining, supply and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas, and it invests in upstream, downstream and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation and power and storage areas.
The company posted record 2022 earnings, along with the biggest profit in the 114-year history of the company. In addition, management announced a 10% increase in the dividend and an extra $2.75 billion of buybacks to an already big scheduled program.
Shareholders receive a 4.02% yield with the coming increase. Bernstein’s $39 target price for BP stock compares with a $44.32 consensus target and Wednesday’s close at $35.85.
Chevron
This energy giant is a solid play for investors who are more conservative and looking to be positioned in the sector. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation, and petrochemicals. The company sports a sizable dividend and has a solid place in natural gas and liquefied natural gas (LNG).
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