Since topping out at $120 a barrel back in the summer of 2022, the major oil benchmarks traded down every month until bottoming last 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 finally broke out.
OPEC announced recently that production levels will stay in place going forward, and Saudi Arabia extended its million-barrels-per-day production cuts through the end of the year. In addition, with Russia cutting oil exports by 300 million barrels, the perfect storm was in place for a move higher.
We screened our 24/7 Wall St. energy research universe looking for stocks that were rated Buy, come with large and dependable dividends, and had solid upside to the posted price targets. Six top stocks came up, and all make sense for growth and income investors looking to add or increase their energy holdings.
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.
Shareholders receive a 2.33% dividend. Wells Fargo has set its price target for APA stock at $53. The consensus target is just $49.73, and the shares closed on Tuesday at $44.20.
Chevron
This integrated giant is a safer way for investors looking to get positioned in the energy sector, and shares have backed up some. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide. The company operates in the following two segments.
The Upstream segment is involved in the exploration, development, production and transportation of crude oil and natural gas; processing, liquefaction, transportation and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage and marketing of natural gas, as well as operating a gas-to-liquids plant.
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