QQQ   359.61 (+0.47%)
AAPL   176.08 (+0.74%)
MSFT   317.54 (+0.17%)
META   300.83 (+0.59%)
GOOGL   131.11 (+0.66%)
AMZN   131.27 (+1.67%)
TSLA   246.99 (+0.86%)
NVDA   422.22 (+1.47%)
NIO   8.34 (-2.23%)
BABA   87.20 (-1.25%)
AMD   97.38 (+1.23%)
T   15.06 (-0.40%)
F   12.59 (+1.29%)
MU   68.58 (-0.44%)
CGC   0.94 (+11.86%)
GE   111.70 (+0.40%)
DIS   81.01 (-0.30%)
AMC   8.15 (+6.82%)
PFE   32.98 (+0.89%)
PYPL   58.86 (+1.69%)
NFLX   384.80 (+1.31%)
QQQ   359.61 (+0.47%)
AAPL   176.08 (+0.74%)
MSFT   317.54 (+0.17%)
META   300.83 (+0.59%)
GOOGL   131.11 (+0.66%)
AMZN   131.27 (+1.67%)
TSLA   246.99 (+0.86%)
NVDA   422.22 (+1.47%)
NIO   8.34 (-2.23%)
BABA   87.20 (-1.25%)
AMD   97.38 (+1.23%)
T   15.06 (-0.40%)
F   12.59 (+1.29%)
MU   68.58 (-0.44%)
CGC   0.94 (+11.86%)
GE   111.70 (+0.40%)
DIS   81.01 (-0.30%)
AMC   8.15 (+6.82%)
PFE   32.98 (+0.89%)
PYPL   58.86 (+1.69%)
NFLX   384.80 (+1.31%)
QQQ   359.61 (+0.47%)
AAPL   176.08 (+0.74%)
MSFT   317.54 (+0.17%)
META   300.83 (+0.59%)
GOOGL   131.11 (+0.66%)
AMZN   131.27 (+1.67%)
TSLA   246.99 (+0.86%)
NVDA   422.22 (+1.47%)
NIO   8.34 (-2.23%)
BABA   87.20 (-1.25%)
AMD   97.38 (+1.23%)
T   15.06 (-0.40%)
F   12.59 (+1.29%)
MU   68.58 (-0.44%)
CGC   0.94 (+11.86%)
GE   111.70 (+0.40%)
DIS   81.01 (-0.30%)
AMC   8.15 (+6.82%)
PFE   32.98 (+0.89%)
PYPL   58.86 (+1.69%)
NFLX   384.80 (+1.31%)
QQQ   359.61 (+0.47%)
AAPL   176.08 (+0.74%)
MSFT   317.54 (+0.17%)
META   300.83 (+0.59%)
GOOGL   131.11 (+0.66%)
AMZN   131.27 (+1.67%)
TSLA   246.99 (+0.86%)
NVDA   422.22 (+1.47%)
NIO   8.34 (-2.23%)
BABA   87.20 (-1.25%)
AMD   97.38 (+1.23%)
T   15.06 (-0.40%)
F   12.59 (+1.29%)
MU   68.58 (-0.44%)
CGC   0.94 (+11.86%)
GE   111.70 (+0.40%)
DIS   81.01 (-0.30%)
AMC   8.15 (+6.82%)
PFE   32.98 (+0.89%)
PYPL   58.86 (+1.69%)
NFLX   384.80 (+1.31%)

Oil and Gas Stocks

An oil and gas stock is public company involved in the exploration, drilling, and refinement of oil and natural gas. What is an oil and gas stock?

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CompanyCurrent PricePE RatioMarket CapVolumeAverage VolumeIndicator(s)
Exxon Mobil Co. stock logo
Exxon Mobil
9.30$465.29 billion11.29 million15.94 millionAnalyst Report
Chevron Co. stock logo
10.70$315.02 billion5.49 million7.95 million
Shell plc stock logo
7.91$217.92 billion2.85 million4.70 million
ConocoPhillips stock logo
11.66$144.93 billion3.29 million5.78 millionAnalyst Revision
Caterpillar Inc. stock logo
17.06$139.88 billion1.26 million3.05 millionAnalyst Downgrade
ServiceNow, Inc. stock logo
80.61$113.98 billion801,4351.45 millionAnalyst Report
BP p.l.c. stock logo
6.34$111.26 billion7.96 million8.52 million
Equinor ASA stock logo
Equinor ASA
4.22$101.01 billion1.38 million3.13 million
Petróleo Brasileiro S.A. - Petrobras stock logo
Petróleo Brasileiro S.A. - Petrobras
3.26$98.16 billion9.71 million21.64 millionPositive News
Enbridge Inc. stock logo
24.61$73.25 billion6.81 million4.09 millionAnalyst Revision
EOG Resources, Inc. stock logo
EOG Resources
8.47$73.22 billion2.71 million3.37 millionPositive News
Canadian Natural Resources Limited stock logo
Canadian Natural Resources
12.43$68.96 billion2.54 million2.09 millionPositive News
ABB Ltd stock logo
19.56$66.98 billion216,201992,975Positive News
Gap Down
Waste Management, Inc. stock logo
Waste Management
28.27$63.66 billion1.30 million1.58 million
Marathon Petroleum Co. stock logo
Marathon Petroleum
5.60$61.66 billion2.12 million3.77 million
General Dynamics Co. stock logo
General Dynamics
18.01$59.89 billion648,6521.16 millionAnalyst Report
Positive News
Enterprise Products Partners L.P. stock logo
Enterprise Products Partners
11.09$59.51 billion6.59 million4.35 millionAnalyst Revision
Positive News
Eni S.p.A. stock logo
5.95$57.73 billion291,032316,514Analyst Upgrade
O'Reilly Automotive, Inc. stock logo
O'Reilly Automotive
25.91$56.26 billion274,122424,901News Coverage
Occidental Petroleum Co. stock logo
Occidental Petroleum
10.72$55.88 billion6.15 million11.28 millionAnalyst Revision
KKR & Co. Inc. stock logo
KKR & Co. Inc.
49.66$54.51 billion3.97 million3.14 millionAnalyst Report
Brookfield Co. stock logo
364.04$53.67 billion1.59 million2.39 million
Phillips 66 stock logo
Phillips 66
5.22$53.55 billion2.49 million3.38 million
Freeport-McMoRan Inc. stock logo
25.66$53.33 billion6.60 million11.90 millionDividend Announcement
Pioneer Natural Resources stock logo
Pioneer Natural Resources
9.61$52.58 billion1.46 million2.13 millionAnalyst Revision
Positive News
Apollo Global Management, Inc. stock logo
Apollo Global Management
43.83$52.42 billion1.38 million2.58 million
The Estée Lauder Companies Inc. stock logo
Estée Lauder Companies
52.33$52.04 billion1.63 million2.09 millionPositive News
Valero Energy Co. stock logo
Valero Energy
5.05$51.75 billion3.24 million4.14 million
TransDigm Group Incorporated stock logo
TransDigm Group
45.35$46.97 billion106,908276,894
AutoZone, Inc. stock logo
19.47$46.90 billion114,336160,166Earnings Report
Insider Selling
Analyst Revision
Gap Down
Hess Co. stock logo
29.09$46.62 billion1.31 million1.70 million
Suncor Energy Inc. stock logo
Suncor Energy
10.16$44.50 billion3.61 million4.69 million
Energy Transfer LP stock logo
Energy Transfer
11.68$44.07 billion19.85 million11.69 millionPositive News
The Williams Companies, Inc. stock logo
Williams Companies
15.58$41.31 billion4.87 million6.84 millionPositive News
Nucor Co. stock logo
7.17$38.61 billion1.25 million1.61 millionAnalyst Revision
Cenovus Energy Inc. stock logo
Cenovus Energy
13.65$38.32 billion9.44 million7.30 millionPositive News
TC Energy Co. stock logo
TC Energy
50.61$37.81 billion2.53 million2.24 millionPositive News
Kinder Morgan, Inc. stock logo
Kinder Morgan
15.09$37.33 billion11.77 million12.82 millionPositive News
Baker Hughes stock logo
Baker Hughes
31.77$36.25 billion5.35 million6.87 million
Waste Connections, Inc. stock logo
Waste Connections
42.51$35.59 billion591,476871,644Analyst Revision
Mplx Lp stock logo
8.91$35.32 billion4.04 million1.83 millionHigh Trading Volume
AMETEK, Inc. stock logo
28.56$35.19 billion1.53 million976,891
Cummins Inc. stock logo
12.97$32.79 billion485,306962,486
Rockwell Automation, Inc. stock logo
Rockwell Automation
23.20$32.67 billion435,752740,357Positive News
Fastenal stock logo
27.81$31.30 billion2.06 million3.16 millionPositive News
LyondellBasell Industries stock logo
LyondellBasell Industries
14.79$30.89 billion1.70 million2.02 millionPositive News
ONEOK, Inc. stock logo
12.27$29.78 billion59.25 million3.25 millionHigh Trading Volume
Diamondback Energy, Inc. stock logo
Diamondback Energy
7.92$27.30 billion1.97 million2.07 millionPositive News
Ecopetrol S.A. stock logo
4.56$26.06 billion4.62 million1.99 millionOptions Volume
High Trading Volume
CGI Inc. stock logo
20.32$23.63 billion109,128139,397Positive News
Genuine Parts stock logo
Genuine Parts
17.19$20.64 billion732,896986,750Positive News
FLEETCOR Technologies, Inc. stock logo
FLEETCOR Technologies
21.88$20.07 billion349,725521,421Analyst Revision
Positive News
Coterra Energy Inc. stock logo
Coterra Energy
6.66$20.06 billion6.05 million7.51 millionPositive News
Albemarle Co. stock logo
5.02$19.58 billion1.79 million1.93 millionPositive News
Tenaris S.A. stock logo
5.03$18.42 billion1.04 million2.17 million
Hubbell Incorporated stock logo
26.02$16.79 billion264,124426,235
Pembina Pipeline Co. stock logo
Pembina Pipeline
8.30$16.72 billion2.31 million739,753Positive News
High Trading Volume
Bunge Limited stock logo
8.55$16.67 billion1.01 million1.44 millionPositive News
Marathon Oil Co. stock logo
Marathon Oil
8.39$16.12 billion10.48 million11.03 million
Texas Pacific Land Co. stock logo
Texas Pacific Land
34.43$14.29 billion17,07236,862Positive News
Watsco Inc stock logo
24.56$14.23 billion32361
EQT Co. stock logo
4.38$14.08 billion3.44 million6.33 million
Watsco, Inc. stock logo
24.29$14.07 billion288,498322,777Analyst Report
LKQ Co. stock logo
13.38$13.35 billion1.30 million1.36 millionAnalyst Downgrade
Aspen Technology, Inc. stock logo
Aspen Technology
N/A$12.98 billion132,742223,501Positive News
Stanley Black & Decker, Inc. stock logo
Stanley Black & Decker
16.47$12.82 billion1.28 million1.64 millionPositive News
Citizens Financial Group, Inc. stock logo
Citizens Financial Group
6.05$12.58 billion3.55 million6.81 million
Graco Inc. stock logo
25.09$12.47 billion475,073855,270Positive News
Evergy, Inc. stock logo
16.20$12.24 billion905,2941.35 million
The Carlyle Group Inc. stock logo
The Carlyle Group
27.10$11.02 billion1.64 million2.92 million
Plains All American Pipeline, L.P. stock logo
Plains All American Pipeline
9.67$10.94 billion8.51 million4.03 millionAnalyst Downgrade
High Trading Volume
CNA Financial Co. stock logo
CNA Financial
11.47$10.90 billion107,384201,873
Ares Capital Co. stock logo
Ares Capital
11.84$10.89 billion3.65 million3.11 millionPositive News
HF Sinclair Co. stock logo
HF Sinclair
4.91$10.66 billion1.92 million2.34 million
TechnipFMC plc stock logo
N/A$9.22 billion4.70 million5.99 million
Darling Ingredients Inc. stock logo
Darling Ingredients
11.15$8.57 billion1.05 million1.33 millionPositive News
Gerdau S.A. stock logo
4.38$8.57 billion6.24 million7.65 millionPositive News
NOV Inc. stock logo
19.84$8.20 billion2.19 million4.30 million
Sasol Limited stock logo
4.56$8.20 billion284,507296,778News Coverage
Permian Resources Co. stock logo
Permian Resources
9.17$7.68 billion9.37 million7.72 millionInsider Selling
Range Resources Co. stock logo
Range Resources
4.48$7.41 billion2.39 million3.97 millionAnalyst Revision
Positive News
Antero Resources Co. stock logo
Antero Resources
5.43$7.24 billion4.15 million5.51 million
ChampionX Co. stock logo
29.87$7.22 billion683,1641.45 millionDividend Announcement
Positive News
Murphy Oil Co. stock logo
Murphy Oil
6.98$7.04 billion1.53 million1.67 millionPositive News
Matador Resources stock logo
Matador Resources
7.62$6.96 billion750,9071.39 millionAnalyst Revision
Southwestern Energy stock logo
Southwestern Energy
1.24$6.85 billion10.06 million22.02 million
RBC Bearings Incorporated stock logo
RBC Bearings
44.07$6.82 billion152,063220,611
RBC Bearings Incorporated stock logo
RBC Bearings
114.36$6.82 billion169,847155,583Analyst Report
Ingredion Incorporated stock logo
11.49$6.51 billion280,528353,336News Coverage
Transocean Ltd. stock logo
N/A$6.42 billion15.46 million18.54 millionGap Up
Applied Industrial Technologies, Inc. stock logo
Applied Industrial Technologies
17.63$6.04 billion249,841207,791Positive News
EnLink Midstream, LLC stock logo
EnLink Midstream
17.14$5.85 billion5.92 million2.47 millionNews Coverage
High Trading Volume
MasTec, Inc. stock logo
N/A$5.79 billion2.21 million672,724Positive News
High Trading Volume
Valaris Limited stock logo
48.35$5.65 billion692,251959,358
Flowserve Co. stock logo
21.81$5.15 billion579,082891,787Positive News
YPF Sociedad Anónima stock logo
YPF Sociedad Anónima
2.71$4.95 billion1.29 million2.20 millionAnalyst Upgrade
News Coverage
Denbury Inc. stock logo
10.82$4.94 billion632,372923,315
National Fuel Gas stock logo
National Fuel Gas
8.65$4.83 billion344,295562,721Positive News
Sunoco LP stock logo
14.09$4.76 billion231,778191,394
Magnolia Oil & Gas Co. stock logo
Magnolia Oil & Gas
6.53$4.75 billion1.32 million1.97 million
Oil Stocks

Every investor should have some exposure to oil for the simple reason that it powers the world. The global economy uses oil in many different ways including the gasoline that powers our cars, diesel fuel that’s essential in the trucking industry, jet fuel required for air travel. Oil is also necessary to heat and cool our homes as well as to power factories.

That’s not a complete list by any measure. And that’s the point. Oil and its derivate products (e.g. gasoline) are still essential to the global economy.

This statement remains true even as renewable energy sources are becoming cost competitive with oil. The simple fact is that the world will still be using oil 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.

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.  

Oil is a commodity and like all commodities, its price 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, 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.

However, even during periods of strong growth, the price of oil is affected by seasonal events. As any driver will tell you, the price of gasoline goes up in the summer months because the amount of driving increases.

And the price of oil is also affected by macroeconomic events. For example, when the Covid-19 pandemic caused millions of offices and businesses to close, it had a devastating effect on the oil and gas sector. In fact, at one point, the futures contract for a barrel of oil turned negative.

Understanding how oil supply and demand impacts oil makes it 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.

And as we mentioned in the introduction, despite the continuing growth of alternative energy sources, 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.

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.

Investing in oil stocks would be easier if all oil companies were affected 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 companies and their role in the production of oil:

  • 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.

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.

ETFs Are a Different Way to Invest in Oil Stocks

The easiest and more popular way to invest in oil stocks is to buy stocks of individual companies. However, investing in an 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.

Buy-and-hold investors may be reading this thinking. Yes, buying oil stocks may be good today, but what about 20 years from now? However, oil companies have been asking themselves that same question for the better part of 30 years. And that’s why some of the largest oil companies continue to make significant investments in renewable energy.

  • ExxonMobil (NYSE: XOM) is investing up to $1 billion per year to conduct research in low-carbon technologies. This may not have a payoff for decades.

  • Chevron (NYSE: CVX) has small investments in wind, solar, and geothermal projects that could potentially power over 110,000 U.S. homes. The company is also a leader in renewable diesel and liquefied natural gas.

  • P. (NYSE: BP) was a pioneer in this area in the early 1990s and currently owns 1.4 gigawatts (GW) of American wind power and solar leader Lightsource BP. The company is also part of a 50-50 joint venture with DuPont (NYSE: DD) in next-generation renewable fuels.

Not surprisingly many of these companies are also among the best performing oil stocks with regard to total return (i.e. share price growth combined with dividends).

Although they remain highly cyclical in nature, oil stocks are still an attractive investment opportunity. The fortunes of oil companies depend to a greater or lesser extent on the price of crude oil. That’s why investors should understand what role a company plays in the production and/or delivery of oil to the market.

However, the benefit of having multiple options is that investors have many options including buying shares of ETFs that add even more diversity. And because oil and gas companies are taking an increased interest in renewable energy many of the most profitable oil stocks today will continue to be good investments in the future.

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