The major oil benchmarks have traded in a tight range this year. One reason it has had a hard time breaking out to the upside is worries over demand from China. However, there were some indications recently that China may be getting ready to jumpstart its economy, as the government eased monetary policy and boosted import quotas for the country’s refineries.
Oil climbed almost 2% to a near three-month high on Monday and more than 1% more on Tuesday, on tightening supplies, rising U.S. gasoline demand and hopes for the Chinese to increase current stimulus measures, plus some solid technical buying as oil traded through the 200-day moving average. Chinese stocks rose on Tuesday as Beijing promised more action to boost the economy.
We screened our 24/7 Wall St. energy research database looking for top exploration and production stocks and one master limited partnership (MLP) that pay among the biggest dividends and are Buy rated across Wall Street. The following five top companies fit the bill perfectly and make sense for growth and income investors looking to initiate or add to energy holdings. Plus, there is a new focus on dividend stocks as the latest federal funds rate increase may be the last.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Coterra Energy
This company was formed by the closing of the $17 billion merger of Cabot Oil & Gas and Cimarex Energy in 2021. Coterra Energy Inc. (NASDAQ: CTRA) is an independent oil and gas company engaged in the development, exploration and production of oil, natural gas and natural gas liquids (NGLs) in the United States. It primarily focuses on the Marcellus Shale, with approximately 177,000 net acres in the dry gas window of the play located in Susquehanna County, Pennsylvania.
The company also holds Permian Basin properties with approximately 306,000 net acres and Anadarko Basin properties located in Oklahoma with approximately 182,000 net acres. In addition, it operates natural gas and saltwater disposal gathering systems in Texas. The company sells its natural gas to industrial customers, local distribution companies, oil and gas marketers, major energy companies, pipeline companies and power-generation facilities.
Investors receive a 7.82% variable dividend. Stifel has a $35 target price on Coterra Energy stock. The consensus target is $29.91, and shares closed on Tuesday at $27.15.
Devon Energy
This may be one of the best value propositions in the sector, and it was one of the first to utilize a variable dividend strategy. Devon Energy Corp. (NYSE: DVN) is an independent energy company that primarily engages in the exploration, development and production of oil, natural gas and NGLs in the United States and Canada.
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