Beleaguered consumers being hit with the worst rise in inflation in 40 years have been cheering the recent decline in the benchmark pricing for oil, and with good reason. In five states, gasoline prices have fallen below $3 a gallon, and they could drop below $4 on the West Coast soon. That is a huge drop considering oil was trading near $120 a barrel in June.
On Monday, crude futures prices briefly hit their lowest levels since December of 2021 on the endless lockdowns in China, where demand has been crushed by the heavy hand of the Chinese Communist Party’s zero-Covid policy. It leads to one likely conclusion for investors now: Oil stocks are terribly overpriced and expensive, or the black gold is incredibly cheap. Many top strategists feel that triple-digit pricing could return by the spring of 2023.
While oil has fallen more than individual stocks, the discount to summer prices is still massive. So, we screened our 24/7 Wall St. energy research database looking for stocks that come with the biggest and most dependable dividends and are Buy rated by top Wall Street firms. While the six we found look outstanding, 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.
As of December 31, 2021, it had proved reserves of approximately 2,892,582 thousand barrels of oil equivalent, which include 189,429 thousand barrels of oil and other liquid hydrocarbons, 14,895 billion cubic feet of natural gas and 220,615 thousand barrels of natural gas liquids.
Coterra Energy stock investors receive a 9.17% dividend. Stifel’s $40 target price compares with a $36.13 consensus target and the most recent close at $28.07, which was up over 3% on Tuesday.
Magellan Midstream Partners
This top midstream master limited partnership checks in high on the distribution list. Magellan Midstream Partners L.P. (NYSE: MMP) engages in the transportation, storage and distribution of refined petroleum products and crude oil in the United States.
The company operates refined products pipelines that transport gasoline, diesel fuel, aviation fuel, kerosene and heating oil to refiners, wholesalers, retailers, traders, railroads, airlines and regional farm cooperatives, as well as to end markets, including retail gasoline stations, truck stops, farm cooperatives, railroad fueling depots, military bases and commercial airports.
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