BIP is a global infrastructure partnership, and holds assets like utilities, toll roads, and cell towers. I would therefore look at Equinor as another safe stock for the core portfolio. With low operating costs and top-tier balance sheets, Pioneer Natural Resources and Devon Energy pay two of the safest dividends in the oil patch. Market value: $29.3 billion. BitTorrent Looks Set To Grow Again Now That TRON Is Behind It, Meet SHIB’s Puppy Pal: The Doge Killer (LEASH) Crypto Just Gained 150%. Home » Investing » Dividend Stocks » This 5.9% Dividend Stock Is the Safest Oil Bet. Best Value Oil and Gas Stocks. MicroSectors U.S. Big Oil Index -2X Inverse … In addition, the company’s continued divestment of non-core assets is likely to strengthen the balance sheet. 3 Oil Stocks to Buy With Safe Dividends. The company also has assets in the Gulf of Mexico, Brazil and Mexico. Meanwhile, the company has a strong cash-rich balance sheet. This outperformed the Russell 1000's 66.1%, return. What's noteworthy about them is their future dividend plans, which makes them two of the safest income stocks in the sector. This year's oil price crash decimated the oil industry. InvestorPlace - Stock Market News, Stock Advice & Trading Tips. Another reason to like Equinor is the fact that the company’s focus is on the Norwegian Continental Shelf. Matthew is a senior energy and materials specialist with The Motley Fool. For now, it’s a perfect storm for oil prices, and only the best oil stocks will survive. Dogecoin Price Predictions: Where Will Crypto Astronauts Take DOGE Ahead of SpaceX Launch? Let’s discuss the following fundamentally strong companies that stand to benefit. It plans to do that by adopting a variable dividend framework for next year. With their cash flows plunging, oil companies cut everything they could to stay afloat, including, . It has already declared a $100 million special dividend, which it will fund with some of those asset sale proceeds. Once the energy sector recovers from the current crisis, Equinor stock is likely to be a value creator. Though the coronavirus outbreak has shaken each and every corner of the broader stock market, energy sector has been the worst hit. In the coming years, the Permian is expected to deliver annual free cash flows of approximately $4 billion. However, as the energy sector is highly cyclical, investors should be careful before purchasing energy dividend stocks . Even with Moody’s, the company’s credit rating is Aa2. Devon estimates that it only needs oil to average about $35 a barrel next year to support its operations, which is slightly below the current level of around $37 a barrel. Supermajor Big Oil Stock #5: Chevron (CVX) Expected Returns: 15.1%; Chevron is the second-largest U.S.-based oil company, behind Exxon Mobil. While this segment does not immediately impact revenue or cash flows, it’s a possible long-term value creator. Future ones could come as oil prices improve, making it not only one of the safest dividend stocks in the oil patch but a potentially high upside one for income investors. Returns as of 05/12/2021. BEP is one of the safest yieldcos you can buy, with strong exposure to worldwide hydroelectric assets and other renewables. Oil Prices Are Approaching Multiyear Highs: Is It Time to Buy Oil Stocks? The oil sector was one of the hardest-hit by those dividend cuts, as many payouts plunged along with oil prices. Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Vishesh Raisinghani | November 25, 2019 | More on: PSI. We all say the terrifying headlines around oil stocks earlier this year as oil futures actually went into negative territory. Copyright © Because it already has a top-tier balance sheet and produces free cash, Pioneer is considering ways to return excess money to investors in the future. Shiba Inu (SHIB) Price Predictions: Where Will SHIB Go After Binance Listing? From a long-term demand perspective, the following point is worth noting — The oil consumption in the United States was 19.96 million barrels per day in fiscal year 2017. One reason to like Chevron is the company’s dividend payout of $5.16, which implies a dividend yield of 5.5%. So, as compared with Treasurys, savings accounts and the vast majority of bonds, there are no truly “safe” stocks. It’s worth noting that for the first quarter of 2020, the company reported Permian production of 580,000 barrels per day. In China and India, the consumption was 13.57 and 4.34 million barrels per day respectively. These figures and all statistics in the tables below are as of March 12. As an example, the Johan Sverdrup oil field officially opened on Jan. 7. Therefore, when considering exposure to oil stocks, it makes sense to pick fundamentally strong companies. Feb. 9, 2021, 06:30 AM. Then, as market conditions improve, Devon plans to increase its base payout. This provides visibility for high-impact exploration opportunities and further upside in production. 7 Cryptocurrencies Under $2 That Could Be The Next Bitcoin. These companies … 1125 N. Charles St, Baltimore, MD 21201. And not just that, geo politics, terrorism, and many other factors affect the price of oil and thus stocks in the oil sector commonly referred to as the energy sector. Applied Materials was down 36% last year ut is up 78% this year; Coty stock lost 67% last year but has clawed back some of the loss with a 78% YTD … It plans to do that by adopting a. for next year. But then I took a good look at my CSI scan and the top stocks on it… I’m seeing names like Devon Energy, Marathon Oil and Diamondback in the top 10 out of 500 stocks. Article printed from InvestorPlace Media, https://investorplace.com/2020/05/3-of-the-safest-oil-stocks-to-buy/. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Two of those resilient payers are, Then, as market conditions improve, Devon plans to increase its base payout. Meanwhile, the company's low-cost operations and strong oil hedging program have it on track to generate free cash flow after funding capital expenses and its dividend this year. With quality assets, production growth visibility and a strong balance sheet, it is a potential value creator. A combination of a slowdown in the global economy toward the end of 2019, along with a significant rise in domestic oil production in the US and the oversupply of oil by OPEC+ organization created the perfect storm that led to the sharp drop in oil prices from early 2020 until the eventual negative price on April 20.”. Market data powered by FactSet and Web Financial Group. However, what stands out the most about their payouts is the upside potential as both plan to layer in special and variable dividends in the future above their rock-solid base payouts. With dividend continuation as a key priority, the stock is attractive for income investors. These 10 gas and oil stocks are rated highest by TheStreet Ratings' value-focused stock rating model. Oil stocks have been among the market’s worst stocks to own over the past few years. Many oil and gas companies operate on subscription-based plans, which lead to steady performance indicators. when it has excess cash. Like Devon's payout, Pioneer's is on rock-solid ground despite all the volatility in the oil patch because it also has an ultra-low breakeven level and fortress-like balance sheet. On May 19, iconic growth investor Louis Navellier will reveal how his powerful quant-based stock system could accelerate your wealth and help fund your retirement. However, not all oil-fueled dividends went down with prices this year, as several proved their durability. Pioneer Natural Resources pays an above-average dividend that currently yields 2.3%, which is slightly above the S&P 500's 1.8% average. Every day TheStreet Ratings produces a list of the top rated stocks.These 10 gas and oil stocks are rated highest by TheStreet Ratings' value-focused stock rating model. When Brent trends above $60 per barrel in the coming years, Chevron stock is well positioned to increase dividends and resume share repurchase. 1. That will enable it to refinance some existing higher-cost debt ($139 million of 3.45% 2021 notes and $244 million of 3.95% 2022 notes) and add some more cash to its balance sheet. He graduated from Liberty University with a degree in Biblical Studies and a Masters of Business Administration. These are the oil and gas stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. I also like BP because of the company’s focus on creating an alternative energy portfolio. This presents better buying opportunities for the big companies. Further, between FY2019 and FY2026, the company expects a steady production growth of approximately 3%. Oil majors tend to be among the safest investments in the oil and gas sector … While Permian production is likely to decline in the coming quarters, the company’s long-term outlook is still robust. The six supermajors are the largest publicly traded oil companies. From an asset perspective, the company’s upstream segment will continue to deliver cash flow growth. 2021 InvestorPlace Media, LLC. 19.96 million barrels per day in fiscal year 2017, production from the asset will ramp-up to 690,000boepd, Louis Navellier and the InvestorPlace Research Staff, The Selloff in C3.ai Stock Presents a Solid Opportunity, Matt McCall and the InvestorPlace Research Staff, Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Wednesday. They could richly reward income investors in the coming years if oil prices cooperate while providing a nice income safety net even if they don't. Energy Transfer was formed in October-2018 by the acquisition of Energy Transfer Partners (previously ETP) by Energy Transfer Equity (previously ETE). This year's oil price crash decimated the, . If the stock reaches our fair valuation level in five years, it will enjoy a 2.9% annualized expansion of its earnings multiple. All rights reserved. Therefore, beyond the current crisis, demand will increase and oil stocks will trend higher. Equity Top: Oil, Gas & Consumable Fuel Source: TheStreet Ratings The devastation flowed all the way to the top as oil giants. Considering the fact, the China and India are home to over 2.7 billion people, there is significant impending demand for oil in the coming decade. I would therefore look at Equinor as another safe stock for the core portfolio. Why Devon Energy Stock Rocketed More Than 30% in February, This Oil Stock's Dividend Is Gushing Higher With Rebounding Oil Prices, Devon Energy (DVN) Q4 2020 Earnings Call Transcript, Copyright, Trademark and Patent Information. Nasdaq more William J. O'Neil For starters, the company has an ultra-low oil price breakeven level to support its payout. Ultra-safe base payouts with the opportunity for more income, Cumulative Growth of a $10,000 Investment in Stock Advisor, The 2 Safest Oil Dividends Right Now @themotleyfool #stocks $DVN $PXD, Devon Energy (DVN) Q1 2021 Earnings Call Transcript. That will enable the company to make additional dividend payments above the current base level if oil prices meet a certain threshold (likely above $45 a barrel for 2021). However, before this day, we had seen an almost 70% drop in crude oil prices over the last 12 months. We’re motley! Operating in a region with low geo-political risk is a key positive coupled with quality assets. However, economic recovery is likely to be slow and it would be optimistic to expect a surge in energy prices anytime soon. Exxon Mobil This remains a top Wall Street energy pick, and it is a safer long-term play for conservative investors. For investors with a long-term horizon, the stock is worth considering even at current levels. Meanwhile, the company's low-cost operations and strong oil hedging program have it on track to generate free cash flow after funding capital expenses and its dividend this year. Companies focused on growth or growth stocks can be another investing … Oil prices have recovered nicely this year, up about 30% to more than $60 a barrel. Companies focused on growth or growth stocks can be another investing … The longer oil prices remain low, the more oil companies will go bankrupt. Many oil and gas companies operate on subscription-based plans, which lead to steady performance indicators. How You Could Double Your Money at Least 6 TIMES This Year. Post FY2022, the production from the asset will ramp-up to 690,000boepd. Hormel Foods (HRL) Dividend Yield: 1.84% Another solid choice in the staples industry at this point … 5-year average total yield … Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Investing in oil stocks may be a good idea, depending on your investment strategy. Even if the crisis prolongs, the company is likely to emerge with a strong balance sheet to grow and create value. The product charges 95 bps in fees per year from investors and climbed 99.2% in a month (read: Oil & ETFs: What Investors Need to Know). In terms of navigating the crisis with a strong balance sheet, BP is another company that looks attractive. With their cash flows plunging, oil companies cut everything they could to stay afloat, including dividends. But now, oil prices have recovered on a relative basis, with Brent currently trading at around $35. So it’s safe to say I’m bullish on oil stocks — for the first time in two years! All rights reserved. Oil prices may have entered a new period of volatility. I am particularly impressed by the company’s long-term action plan. In the world of big oil, Chevron is an industry-leading blue chip that conservative income investors can rely on for the foreseeable future. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Oil stocks are very popular in the income-oriented investing community, primarily thanks to the generous dividends that many of these stocks offer. With these factors in consideration, its not surprising that the company commands a A- credit rating from S&P. This 5.9% Dividend Stock Is the Safest Oil Bet. This represented production growth of 48% as compared to Q1 2019. Exxon Mobil common stock is yielding 10.2%. With low operating costs and top-tier balance sheets, Pioneer Natural Resources and Devon Energy pay two of the safest dividends in the oil patch. To be slow and it is a safer long-term play for conservative investors oil-fueled dividends down... 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