Since topping out at $120 a barrel back in the summer of 2022, the major oil benchmarks had traded down every month until bottoming in the beginning of December. The decline from the top in June of 2022 was a staggering 40%. While the oil majors can still make money at that level, with a declining price many opted to slow or halt production. By March of this year, West Texas Intermediate had dropped to $67.61, a bottom that stayed in place until late June, when oil broke out.
The Organization of the Petroleum Exporting Countries (OPEC) announced last Friday that its production levels will stay in place going forward, and Saudi Arabia extended its 1 million barrel-per-day production cuts through September and hinted it could continue to keep those cuts in place past then. In addition, Russia said it will be cutting oil exports in September by 300 million barrels.
The cuts, combined with an increase in demand from China, could spike prices in a big way, especially with the peak usage and summer driving still in the playbook for another few weeks.
We screened our 24/7 Wall St. energy research universe looking for stocks that are rated Buy, come with large and dependable dividends and have solid upside to the posted price targets. Seven top companies came up, and all make sense for growth and income investors looking to add energy.
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 7.62% dividend. Stifel has a $35 target price on Coterra Energy stock. The consensus target is lower at $29.61, and the shares closed on Monday at $27.80 apiece.
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