One reason many analysts may have a liking for Enterprise Products Partners stock might be its distribution coverage ratio. This ratio is well above 1 times, making it relatively less risky among the MLPs.
The distribution yield here is 7.34%. Enterprise Products Partners stock has a $33 price target at J.P. Morgan. The consensus target is $32.06, and shares closed on Friday at $27.39.
Exxon Mobil
This mega-cap energy leader trades at a reasonable valuation and still offers investors an excellent entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.
Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.
Top Wall Street analysts expect Exxon to remain a key beneficiary in this higher oil price environment, and most remain strongly positive about the company’s sharp positive inflection in capital allocation strategy, upstream portfolio, and leverage to a further demand recovery, with Exxon Mobil offering greater downstream/chemicals exposure relative to peers.
The record second-quarter profit that was more than double from a year ago and topped Wall Street estimates, as rising oil and gas output overcame a pullback in energy prices from high levels.
Shareholders receive a 3.17% dividend. UBS has set its price target at $139, well above the consensus target of $123.62. On Friday, Exxon Mobil stock closed at $114.94.
Pioneer Natural Resources
Many Wall Street analysts love this stock as a pure crude oil play, and the company also employs a variable dividend strategy. Pioneer Natural Resources Co. (NYSE: PXD) operates as an independent oil and gas exploration and production company in the United States.
The company explores for, develops and produces oil, NGLs and natural gas. It has operations in the Midland Basin in West Texas. As of December 31, 2021, the company had proved undeveloped reserves and proved developed non-producing reserves of 130 million barrels of oil, 92 million barrels of NGLs and 462 billion cubic feet of gas, and it owned interests in 11 gas processing plants.
Its production services are supported by 100 well-servicing rigs, more than 100 cased-hole, open-hole and offshore wireline units, and a range of advanced coiled tubing units.
The company is a huge player in the Permian Basin and the Eagle Ford in Texas, and it owns more than 20,000 locations in the world’s second-largest oil reservoir in the Midland Basin. With a stellar balance sheet, the company is poised to remain a top player in the Permian, as it expects to deliver solid production growth going forward.
Investors receive a 7.39% dividend, which, again, is variable. The Piper Sandler target price on Pioneer Natural Resources stock is $332. The consensus target is much lower at $261.54, and shares were last seen trading at $223.07.
The reality for investors and consumers is that OPEC and the Saudis have made it painfully clear they are going to support oil prices by cutting production. Any attempts to further dip into the Strategic Petroleum Reserve, after already taking it to the lowest levels in over 40 years, will likely prove to be very unpopular and will do little to mitigate prices.
Originally published at 24/7 Wall St.
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