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 crude 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 earlier this month that its production levels will stay in place going forward, and Saudi Arabia extended its 1 million barrel per day production cuts through September. In addition, Russia said it will be cutting oil exports in September by 300 million barrels. These cuts, combined with the potential 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 month.
We screened our 24/7 Wall St. energy research universe looking for stocks that were rated Buy, pay large and dependable dividends, and had 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.
APA
This company was long considered an industry leader when it was known as Apache, and the stock is perhaps offering one of the best entry points in the sector. APA Corp. (NYSE: APA) explores for and produces oil and gas properties. It has operations in the United States, Egypt and the United Kingdom, as well as has exploration activities offshore Suriname. It also operates gathering, processing and transmission assets in West Texas, as well as holds ownership in four Permian-to-Gulf Coast pipelines.
APA is one of the largest U.S. exploration and production companies, with 2.3 billion barrels of oil equivalent of proven reserves (63% liquids). It is an explorer, acquirer and exploiter, and a fiscally conservative company that has grown its reserves and production consistently via acquisitions and organic projects.
The company also operates gathering, compression, processing and transmission assets in West Texas, as well as holds ownership in four Permian Basin long-haul pipelines.
Investors receive a 2.26% dividend. Truist Financial has a $59 price target for APA stock, while the consensus is just $48.88. The final share price on Monday was $43.90.
Chevron
This integrated giant is a safer way for investors looking to get positioned in the energy sector, and shares have backed up nicely. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide. The company operates in the following two segments.
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