S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
pixel
pixel
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
pixel
pixel
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
pixel
pixel
S&P 500   4,455.48
DOW   34,798.00
QQQ   373.33
pixel
pixel

Oil Stocks

An oil stock is publicly-traded company involved in the exploration, drilling and refinement. What is an oil stock?

MarketRank evaluates a company based on community opinion, dividend strength, institutional and insider ownership, earnings and valuation, and analysts forecasts.
Available with a MarketBeat All Access Subscription
MarketRank™Upgrade to All Access to use the All Ranks Filter
Media sentiment refers to the percentage of positive news stories versus negative news stories a company has received in the past week.
Available with a MarketBeat All Access Subscription
Media SentimentUpgrade to All Access to use the All Sentiments Filter
Analyst consensus is the average investment recommendation among Wall Street research analysts.
Available with a MarketBeat All Access Subscription
Analyst ConsensusUpgrade to All Access to use the All Ratings Filter
CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeIndicator(s)
Exxon Mobil logo
XOM
Exxon Mobil
$57.59
+0.9%
N/A$243.81 billion22.31 million25.19 million
Chevron logo
CVX
Chevron
$100.60
+0.0%
53.80$194.55 billion8.23 million10.49 millionAnalyst Downgrade
ServiceNow logo
NOW
ServiceNow
$666.31
+0.0%
793.24$132.00 billion499,7851.38 millionAnalyst Report
TTE
TotalEnergies
$46.60
0.0%
19.58$123.64 billion2.14 million2.12 millionAnalyst Report
News Coverage
Caterpillar logo
CAT
Caterpillar
$196.82
+0.0%
24.70$107.75 billion2.20 million3.43 millionShort Interest ↓
PetroChina logo
PTR
PetroChina
$48.82
0.0%
5.86$89.35 billion156,558214,330Analyst Downgrade
BP logo
BP
BP
$26.24
+0.3%
10.25$88.09 billion8.34 million13.75 millionAnalyst Downgrade
ConocoPhillips logo
COP
ConocoPhillips
$65.02
+2.1%
56.05$87.07 billion11.12 million9.36 millionDividend Increase
Analyst Report
Analyst Revision
News Coverage
Enbridge logo
ENB
Enbridge
$40.03
-0.1%
17.25$81.09 billion1.75 million4.22 million
BHP Group logo
BHP
BHP Group
$54.53
-0.9%
8.09$80.32 billion4.02 million2.52 millionAnalyst Downgrade
Analyst Revision
Equinor ASA logo
EQNR
Equinor ASA
$23.94
-0.5%
N/A$77.72 billion2.25 million2.82 millionAnalyst Report
News Coverage
Petróleo Brasileiro S.A. - Petrobras logo
PBR
Petróleo Brasileiro S.A. - Petrobras
$10.30
-0.9%
3.46$67.18 billion17.55 million33.86 millionPositive News
China Petroleum & Chemical logo
SNP
China Petroleum & Chemical
$49.32
0.0%
5.71$59.71 billion112,859153,126Upcoming Earnings
BHP Group logo
BBL
BHP Group
$51.31
-1.0%
7.61$54.19 billion1.93 million2.00 millionAnalyst Revision
News Coverage
TC Energy logo
TRP
TC Energy
$49.67
+0.0%
31.04$48.64 billion1.77 million1.87 millionPositive News
Enterprise Products Partners logo
EPD
Enterprise Products Partners
$21.45
0.0%
12.33$46.88 billion9.42 million6.74 millionGap Up
EOG Resources logo
EOG
EOG Resources
$78.10
+1.6%
24.25$45.60 billion5.12 million4.52 millionDividend Announcement
O'Reilly Automotive logo
ORLY
O'Reilly Automotive
$625.54
-0.1%
22.45$43.13 billion291,743510,651
Canadian Natural Resources logo
CNQ
Canadian Natural Resources
$35.23
+0.0%
12.95$41.79 billion2.18 million3.24 millionAnalyst Report
News Coverage
Positive News
Schlumberger logo
SLB
Schlumberger
$29.01
+0.0%
40.29$40.57 billion7.41 million12.47 millionNews Coverage
Pioneer Natural Resources logo
PXD
Pioneer Natural Resources
$162.03
+0.0%
120.02$39.53 billion2.30 million2.47 millionAnalyst Revision
News Coverage
Positive News
Gap Down
Marathon Petroleum logo
MPC
Marathon Petroleum
$61.89
+0.0%
5.45$39.50 billion3.86 million5.67 million
Kinder Morgan logo
KMI
Kinder Morgan
$16.53
+0.2%
22.04$37.47 billion9.88 million15.16 millionPositive News
Cummins logo
CMI
Cummins
$227.66
0.0%
15.29$32.69 billion755,3621.06 million
LyondellBasell Industries logo
LYB
LyondellBasell Industries
$93.10
0.0%
7.64$31.14 billion1.21 million1.74 million
The Williams Companies logo
WMB
The Williams Companies
$25.40
0.0%
27.02$30.86 billion5.09 million7.88 million
Stanley Black & Decker logo
SWK
Stanley Black & Decker
$185.36
+0.0%
16.68$30.21 billion900,3511.13 millionNews Coverage
Suncor Energy logo
SU
Suncor Energy
$20.22
+0.0%
24.96$29.99 billion3.55 million7.58 million
Phillips 66 logo
PSX
Phillips 66
$68.04
-0.8%
N/A$29.80 billion2.42 million2.93 million
Ecopetrol logo
EC
Ecopetrol
$13.24
0.0%
12.04$27.22 billion349,6431.03 millionAnalyst Downgrade
Albemarle logo
ALB
Albemarle
$226.40
0.0%
36.69$26.48 billion704,3751.40 millionShort Interest ↓
Occidental Petroleum logo
OXY
Occidental Petroleum
$28.10
+0.0%
N/A$26.24 billion13.47 million18.20 millionAnalyst Revision
Energy Transfer logo
ET
Energy Transfer
$9.28
0.0%
7.08$25.10 billion9.28 million17.79 millionAnalyst Upgrade
Positive News
Hess logo
HES
Hess
$75.34
+0.0%
N/A$23.33 billion2.03 million2.10 million
Devon Energy logo
DVN
Devon Energy
$33.09
+0.0%
183.84$22.40 billion10.33 million11.99 millionShort Interest ↑
Gap Down
Cenovus Energy logo
CVE
Cenovus Energy
$9.57
-0.2%
N/A$19.31 billion8.89 million9.52 millionNews Coverage
Positive News
Halliburton logo
HAL
Halliburton
$21.00
+0.0%
131.26$18.70 billion6.12 million9.47 millionAnalyst Report
Insider Selling
Pembina Pipeline logo
PBA
Pembina Pipeline
$31.44
N/A$17.29 billion999,0601.14 million
Quanta Services logo
PWR
Quanta Services
$117.29
0.0%
31.45$16.34 billion1.03 million1.11 millionAnalyst Report
Continental Resources logo
CLR
Continental Resources
$44.22
0.0%
42.93$16.25 billion1.12 million2.10 million
Diamondback Energy logo
FANG
Diamondback Energy
$88.72
+1.0%
N/A$16.06 billion2.38 million2.40 millionNews Coverage
Vedanta logo
VEDL
Vedanta
$15.65
0.0%
7.21$14.54 billion1.50 million943,665News Coverage
Loews logo
L
Loews
$52.96
+0.0%
9.16$13.63 billion783,507894,202
Advance Auto Parts logo
AAP
Advance Auto Parts
$215.66
+0.0%
23.11$13.59 billion464,361824,958
Graco logo
GGG
Graco
$73.49
-0.6%
28.71$12.47 billion880,073663,554Dividend Announcement
Tenaris logo
TS
Tenaris
$20.16
0.0%
25.20$11.90 billion850,4891.93 million
Bunge logo
BG
Bunge
$78.77
+0.1%
5.85$11.16 billion827,4171.28 million
Targa Resources logo
TRGP
Targa Resources
$47.42
0.0%
59.28$10.84 billion832,7101.98 million
Watsco logo
WSO
Watsco
$277.57
-0.4%
30.84$10.75 billion81,443167,887News Coverage
Watsco logo
WSO.B
Watsco
$277.40
+0.0%
30.82$10.75 billion2,05415High Trading Volume
Sasol logo
SSL
Sasol
$16.52
0.0%
5.90$10.45 billion249,337641,458News Coverage
Magellan Midstream Partners logo
MMP
Magellan Midstream Partners
$46.20
-1.3%
11.52$10.24 billion1.07 million1.35 million
Marathon Oil logo
MRO
Marathon Oil
$12.85
+0.0%
N/A$10.13 billion16.95 million21.60 millionShort Interest ↓
Texas Pacific Land logo
TPL
Texas Pacific Land
$1,301.52
-0.4%
50.94$10.09 billion22,12251,370
Huaneng Power International logo
HNP
Huaneng Power International
$23.17
+0.0%
N/A$9.09 billion91,34643,040News Coverage
High Trading Volume
Western Midstream Partners logo
WES
Western Midstream Partners
$20.29
0.0%
9.39$8.38 billion1.07 million1.36 million
Cimarex Energy logo
XEC
Cimarex Energy
$81.39
+0.0%
N/A$8.37 billion965,6021.22 millionGap Down
APA logo
APA
APA
$21.91
+1.7%
12.31$8.28 billion9.07 million8.00 millionDividend Increase
Analyst Revision
Phillips 66 Partners logo
PSXP
Phillips 66 Partners
$35.73
+0.1%
17.60$8.16 billion240,430795,197
Cabot Oil & Gas logo
COG
Cabot Oil & Gas
$20.34
+0.0%
26.42$8.13 billion8.66 million7.62 millionAnalyst Downgrade
Gap Down
Huntington Ingalls Industries logo
HII
Huntington Ingalls Industries
$195.37
+0.0%
10.57$7.84 billion266,792286,000
ITT logo
ITT
ITT
$85.76
0.0%
115.89$7.38 billion354,127452,993
Plains All American Pipeline logo
PAA
Plains All American Pipeline
$10.03
+0.0%
62.69$7.20 billion3.07 million4.66 million
MasTec logo
MTZ
MasTec
$86.95
-0.2%
17.25$6.46 billion541,237825,150
MDU Resources Group logo
MDU
MDU Resources Group
$29.46
0.0%
14.16$5.96 billion595,0771.00 millionPositive News
Chesapeake Energy logo
CHK
Chesapeake Energy
$58.59
0.0%
N/A$5.76 billion1.28 million1.75 millionPositive News
Gap Up
Eagle Materials logo
EXP
Eagle Materials
$135.55
+0.0%
16.82$5.68 billion390,674392,797Analyst Downgrade
Clean Harbors logo
CLH
Clean Harbors
$103.62
0.0%
31.31$5.64 billion192,258270,148Analyst Upgrade
Antero Resources logo
AR
Antero Resources
$17.61
0.0%
N/A$5.53 billion6.27 million7.63 million
DDL
Dingdong (Cayman)
$23.15
+0.0%
N/A$5.46 billion17,70436,434Short Interest ↑
Range Resources logo
RRC
Range Resources
$20.38
+2.8%
N/A$5.29 billion5.03 million5.32 million
HollyFrontier logo
HFC
HollyFrontier
$32.31
-0.1%
27.15$5.25 billion778,3312.52 millionNews Coverage
C3.ai logo
AI
C3.ai
$49.48
-0.4%
N/A$5.12 billion1.58 million3.89 millionInsider Selling
NOV logo
NOV
NOV
$12.96
+0.0%
N/A$5.06 billion2.87 million5.26 millionAnalyst Report
Driven Brands logo
DRVN
Driven Brands
$29.93
0.0%
73.00$5.01 billion290,097441,325News Coverage
Southwestern Energy logo
SWN
Southwestern Energy
$4.82
0.0%
N/A$4.89 billion14.98 million15.76 millionPositive News
National Fuel Gas logo
NFG
National Fuel Gas
$51.80
+1.1%
36.48$4.72 billion244,755385,488Dividend Announcement
Insider Buying
Positive News
Atotech logo
ATC
Atotech
$24.12
0.0%
N/A$4.70 billion235,715410,481News Coverage
Shell Midstream Partners logo
SHLX
Shell Midstream Partners
$11.91
-0.8%
9.02$4.68 billion987,5491.55 millionNews Coverage
APi Group logo
APG
APi Group
$20.80
0.0%
N/A$4.67 billion1.83 million1.63 million
PDC Energy logo
PDCE
PDC Energy
$46.99
+0.0%
N/A$4.64 billion525,109949,756
The Chemours logo
CC
The Chemours
$27.32
0.0%
17.86$4.51 billion2.51 million1.53 millionNews Coverage
ChampionX logo
CHX
ChampionX
$21.84
0.0%
364.06$4.41 billion1.11 million1.23 million
Magnolia Oil & Gas logo
MGY
Magnolia Oil & Gas
$16.62
0.0%
15.68$3.92 billion5.71 million1.48 millionNews Coverage
High Trading Volume
Matador Resources logo
MTDR
Matador Resources
$33.50
-2.0%
N/A$3.92 billion1.32 million1.75 million
Asbury Automotive Group logo
ABG
Asbury Automotive Group
$196.03
+0.0%
8.86$3.79 billion133,077153,414Gap Down
Denbury logo
DEN
Denbury
$74.12
0.0%
N/A$3.71 billion812,787845,871Analyst Revision
NewMarket logo
NEU
NewMarket
$336.84
+0.0%
12.95$3.68 billion40,13536,031
Brookfield Business Partners logo
BBU
Brookfield Business Partners
$46.34
+1.2%
13.71$3.64 billion28,99521,482News Coverage
Positive News
Murphy Oil logo
MUR
Murphy Oil
$22.31
+0.0%
N/A$3.45 billion1.77 million3.10 millionGap Down
Enable Midstream Partners logo
ENBL
Enable Midstream Partners
$7.88
0.0%
26.27$3.43 billion368,373555,606
California Resources logo
CRC
California Resources
$41.29
0.0%
N/A$3.38 billion1.18 million1.58 millionAnalyst Report
Gap Up
EnLink Midstream logo
ENLC
EnLink Midstream
$6.74
+0.3%
N/A$3.29 billion1.49 million2.47 million
TechnipFMC logo
FTI
TechnipFMC
$7.21
+0.0%
21.21$3.25 billion2.96 million8.08 million
Viper Energy Partners logo
VNOM
Viper Energy Partners
$20.95
+0.2%
N/A$3.25 billion208,301515,992News Coverage
Kirby logo
KEX
Kirby
$50.22
-1.3%
53.43$3.02 billion523,847402,808Short Interest ↓
Rackspace Technology logo
RXT
Rackspace Technology
$13.99
0.0%
N/A$2.93 billion1.20 million1.67 millionNews Coverage
Worthington Industries logo
WOR
Worthington Industries
$53.53
-0.3%
4.04$2.76 billion250,611255,112Upcoming Earnings
Analyst Upgrade
News Coverage
Sinopec Shanghai Petrochemical logo
SHI
Sinopec Shanghai Petrochemical
$24.59
0.0%
4.94$2.66 billion19,55033,045
Crescent Point Energy logo
CPG
Crescent Point Energy
$4.23
+0.0%
1.45$2.46 billion2.84 million4.31 millionPositive News
Gap Down
The How And Why of Investing in Oil Stocks

For a long time having exposure to oil was a no-brainer for any investor. From air travel and commuting to heating our homes and powering factories, oil truly powered the world.

And oil and its derivative products (e.g. gasoline) still does to a great extent. However, the fallout of the novel coronavirus may have begun a process in which the impact of oil on global markets is becoming less and less. That’s because renewable energy sources were already becoming cost-competitive with oil, and that price gap is lessening as time goes on.

Nevertheless, the world will still be using fossil fuels for the near future. And that means that oil stocks belong in your portfolio. Oil stocks contain less risk than trying to buy and sell oil on the options or futures markets. And most oil stocks pay a dividend which gives investors a predictable income stream that can make up for the volatility that is inherent in these stocks.

Introduction

The most important thing to remember about investing in oil stocks is that your investment is fundamentally driven by supply and demand. Simply put when demand for crude oil is high, prices go up. Conversely when demand decreases, so do prices.

For decades, particularly since World War II, the demand for oil was high. Many nations were building a new infrastructure of roads and bridges. Air travel was making the world smaller and businesses became truly international. And powering all of it was oil.

You can invest in oil by trading the commodity directly by trading options in the futures market. Some investors will also choose to invest in an exchange-traded fund (ETF) that is tied to the price of oil or includes a basket of companies with exposure to the oil sector.

However, a more indirect (and slightly less risky) way to play the oil market is to buy oil stocks. An oil stock can cover many areas of oil production. In this article, we’ll review why you should consider investing in oil; we’ll review your investment options, and more directly the different types of oil companies that you can invest in.   

Why should you invest in oil today?

The pandemic brought on by the novel coronavirus has been devastating for the oil and gas sector. As we mentioned above, this is a supply and demand business. And the first hint that the virus was worse than we thought was when oil futures began falling in February.

This is an important thing to know about investing in oil. Oil has been a reliable indicator of economic activity. When analysts and institutional investors forecast decreasing demand for oil, they bid down the price of crude oil. This in turn affects oil stocks which as we said tend to move with the market.

Due to the severe demand restriction during the pandemic, several oil companies have gone bankrupt. And the share price of most oil stocks has fallen dramatically. And when the notion of a “V-shaped” recovery did not materialize, it has put further pressure on oil prices.

Nevertheless, despite several near-term headwinds, oil will remain a worthwhile investment. And oil stocks can be a way for risk-averse investors to have exposure to the oil sector without dabbling in the commodities market.

The basics of oil production

Oil is expensive to bring to market. It’s more than just the cost of extracting it from the ground. Oil has to be transported, stored, and in many cases refined into gasoline or other products. And those costs are usually fixed.

This is a double-edged sword for the oil companies. When a barrel of oil sells for more than the sum of all these costs, oil companies turn a profit. And stocks of oil companies will go up as well.

However, the opposite is also true. When oil sells for less than, many of these companies will lose money. During these times, stocks of oil companies will go down.

Why buy oil stocks?

Although oil stocks generally move in concert with the price of a barrel of crude, the correlation is not always exact. For example, many oil companies will talk of a “break-even” point. This can allow the price of crude to fall a little while these companies can still be profitable. This makes oil stocks a slightly less risky option than trading oil in the options or futures market.

But perhaps the most important reason to own oil stocks is that many oil stocks pay a dividend. For example, prior to the pandemic some oil companies had increased their dividends for decades. These companies know that preserving its dividends has to be a priority because of the volatility associated with the underlying price of oil.

However, it’s important that you focus less on a company’s dividend yield (which can move up or down with the share price), but also on how the yield compares to the company’s free cash flow (FCF). In general, investors want to find companies that can pay their entire dividend obligation out of its FCF. This “payout ratio” should be at least 1.1.

Different types of oil stocks

Investing in oil stocks would be easier if all oil companies were affected in the same way by rising or falling crude prices. But, in fact, the oil sector is very diverse and each sector may be affected slightly differently by rising or falling oil prices.

Here is a brief description of different kinds of oil stocks:

  • Upstream companies – These are the companies investors most frequently think about as an oil stock. These companies are involved in exploration and production. As the name implies, this means these companies explore locations looking for oil. When they find a promising location, they drill wells to extract the oil. However as you might imagine, these companies are affected most by changes in the price of crude oil. The largest upstream company in the United States is ConocoPhillips (NYSE:COP).

  • Midstream companies – These companies transport crude oil through pipelines that is then stored in terminals that they own. The oil stays there until it is sent to be refined or exported. Some of these companies will even transport the newly refined company through its own pipeline networks. Midstream companies are slightly more insulated from oil price fluctuations because they usually operate on long-term contracts with fixed terms. One of the leading midstream companies is Enterprise Products Partners (NYSE:EPD). A unique aspect of EPD stock is that the company is a master limited partnership. This has tax advantages for individual shareholders but can increase the risk of larger losses.

  • Downstream companies – These companies refine oil into other products such as gasoline and petrochemicals. In many cases, these companies are also part of selling this refined product to consumers. Two examples of downstream companies are gas station operators and refinery operators. Although these companies are not directly affected by a drop in crude prices, their stock still tend to fall when oil prices fall. One of the major downstream companies is Phillips 66 (NYSE:PSX).

  • Integrated companies – These companies do business in more than one of the fields mentioned above. When you hear a reference to “Big Oil” companies, it is a reference to companies such as ExxonMobil (NYSE:XOM) and Chevron (NYSE:CVX) that have large upstream and downstream operations with some midstream business.

  • Oilfield services companies – Another way to invest in oil stocks is through the companies that provide equipment, operational support, and logistics to other oil companies, typically upstream companies. Oilfield services companies are hurt when oil prices fall because one of the first things upstream companies will do is cut their service costs.

ETFs are a different way to play oil stocks

The easiest and more popular way to invest in oil stocks is to buy stocks of individual companies. However, investing in exchange-traded funds (ETFs) can be a smart way to manage the risk of this sector. An oil ETF allows investors to invest in one or more of the sectors listed above at one time. For example, the SPDR Oil and Gas Exploration & Production ETF (NYSEARCA: XOP) tracks the upstream sector.

The final word about investing in oil stocks

Oil stocks have been battered in 2020. But the near-term outlook for oil makes oil stocks an attractive investment opportunity. The fortunes of oil companies are impacted to a greater or lesser extend to the price of crude oil. And that’s why it’s important for investors to understand what subsector of the oil industry the company they are interested in investing in is engaged in.

However the benefit of having multiple options is that investors have many options including buying shares of ETFs that add even more diversity.



Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.