While everyone across the nation is cheering lower gasoline prices, it is important to remember that the flood of oil from the United States Strategic Petroleum Reserve (SPR) will soon end, after the president has drawn down the emergency use stash to its lowest level since 1984. The irony is that the SPR is supposed to be only for emergency use, and with Hurricane Ian barreling toward what could be a category 4 landfall on the Florida coast, major oil companies may be forced to shut down drilling operations in the gulf, and supplies for citizens could be threatened.
In the recent market sell-off, crude oil has been torched, dropping a stunning 8% over the past two days before turning higher. Demand is expected to stay strong, and Saudi Aramco CEO Amin Nasser stated recently that “The oil market is not in balance, and supply is getting tighter because there is little in the way of new supply to make up for natural depletion.” That combined with OPEC set on cutting production could light a fire under the top stocks.
The good news for investors is the huge bear market sell-off in energy stocks has drastically lowered the share prices of some of the leading energy stocks, including those that pay some of the highest dividends in the sector. Here we focus on seven large-cap leaders that pay those big dividends and have shares rated Buy that offer investors the best entry points in some time. It is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
BP
This is one of the premier European integrated oil giants, and Goldman Sachs analysts are quite positive on the shares. BP PLC (NYSE: BP) engages in the energy business worldwide. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants. It is involved in refining, supply and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas, and it invests in upstream, downstream and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation and power and storage areas.
Shareholders receive a 4.71% yield. The Goldman Sachs price target for the domestic shares of BP stock is $45. The $37.28 consensus target is lower but still well above Tuesday’s close at $27.55.
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