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Best Oil Stocks – Investing in Oil Company Stocks (2023 Updated)

By Amir Shalev | Last update: 4/25/2023

Best Oil Stocks article summary:

Investing in oil stocks can be a profitable strategy for diversifying your investment portfolio.  In previous a article we covered gold investment including investing in gold stocks. With the global demand for energy continually rising, oil company stocks present a significant opportunity for investors. In this article, we will explore the best oil stocks to buy, including Canadian oil stocks, U.S. oil stocks, and more.

That’s it in a nutshell! If you want to learn more on investing in oil companies read on, here’s what I’ll cover:

  1. How to choose oil company stocks
  2. Canadian oil stocks
  3. U.S. oil stocks
  4. Russian oil stocks
  5. FAQs
  6. Conclusion

1. Oil Company Stocks: Key Factors to Consider

Before diving into the list of oil stocks, it’s essential to consider a few key factors that can help you make informed decisions when investing in oil company stocks:

  • Company’s financial health: Analyze the balance sheet, income statement, and cash flow statement to assess the company’s financial stability.
  • Dividend yield: Look for companies that offer a stable and high dividend yield, which can provide a steady income stream to investors.
  • Production and reserve growth: Evaluate the company’s ability to increase production and grow its reserves over time.
  • Geopolitical risks: Be mindful of geopolitical risks and tensions that may impact oil prices and the company’s operations, such as the ongoing conflict between Russia and Ukraine that has led to a boycott on investing in Russian companies.

2. Canadian Oil Stocks

Canada is home to some of the largest oil reserves in the world, making Canadian oil stocks an attractive option for investors. Some of the top Canadian oil stocks include:

  • Suncor Energy Inc. (SU)
  • Canadian Natural Resources Limited (CNQ)
  • Enbridge Inc. (ENB)
  • Cenovus Energy Inc. (CVE)
  • MEG Energy (TSE: MEG)

3. U.S. Oil Stocks

U.S. oil stocks offer a diverse range of investment opportunities, from large multinational corporations to smaller independent producers. Some top U.S. oil stocks to consider include:

  • Exxon Mobil Corporation (XOM)
  • Chevron Corporation (CVX)
  • ConocoPhillips (COP)
  • occidental petroleum (OXY)
  • Pioneer Natural Resources Company (PXD)

4. Russian Oil Stocks: Value Investing Amid Geopolitical Tensions

Russian oil stocks have historically been considered good value investments due to the country’s vast oil reserves and the global demand for energy. Some of these companies have demonstrated strong financial performance and growth potential, making them attractive options for value investors. However, the recent conflict between Russia and Ukraine and the subsequent boycott on Russian companies have made these stocks uninvestible for many Western investors.

Examples of Russian Oil Stocks

Here are a few examples of Russian oil stocks that were once considered good value investments:

  • Gazprom Neft (GAZ): Gazprom Neft is one of Russia’s largest oil companies, with a strong track record of financial performance, production growth, and reserve expansion. The company also offers a relatively high dividend yield, making it an attractive option for income-focused investors.
  • Rosneft (ROSN): Rosneft is another prominent Russian oil company known for its vast oil reserves and production capabilities. The company has consistently demonstrated robust financials and a commitment to increase production and expand its reserves, making it a compelling choice for value investors.
  • Lukoil (LKOH): Lukoil is a leading Russian oil company with a strong international presence. The company has displayed impressive financial results and a commitment to increasing production and efficiency, which has attracted value investors seeking exposure to the Russian oil sector.

Geopolitical Risks Impacting Russian Oil Stocks

While Russian oil stocks may offer value investing opportunities, the ongoing conflict between Russia and Ukraine has led to a boycott on Russian companies by many Western investors. This situation has significantly limited the investment opportunities in Russian oil stocks and created considerable risks for investors considering exposure to the Russian oil sector.

As a result of the geopolitical tensions, investors need to weigh the potential rewards against the risks associated with investing in Russian oil stocks. It’s essential to remain informed about the evolving geopolitical landscape and its impact on the oil industry to make well-informed investment decisions.

5. FAQ: Frequently Asked Questions about Oil Stocks

What are the best oil stocks to buy right now?

The best oil stocks to buy right now depend on your investment goals and risk tolerance. Some top options include large multinational corporations with stable financials and high dividend yields, such as Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX), as well as Canadian oil stocks like Suncor Energy Inc. (SU) and Canadian Natural Resources (CNQ). It’s essential to research and analyze each company before making an investment decision.

What is the top oil stock?

There isn’t a single “top” oil stock, as the best choice depends on your investment objectives and risk appetite. Investors should consider various factors, such as financial health, dividend yield, production and reserve growth, and geopolitical risks, before deciding on the top oil stock for their portfolio.

Is it good to invest in oil stocks?

Investing in oil stocks can be a good strategy for diversifying your portfolio, especially if you believe in the long-term growth potential of the energy sector. However, oil stocks can be volatile and are affected by fluctuations in oil prices and geopolitical events. We believe that oil prices will remain elevated due to lack of supply and so personally invested in oil stocks.

Which oil stock pays the highest dividend?

Oil stocks with high dividend yields can provide a steady income stream for investors. Some oil stocks known for their high dividend payouts include Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), and Enbridge Inc. (ENB). However, it’s crucial to evaluate the company’s financial health and dividend sustainability before investing solely based on dividend yield. For example Pterobras the Brazilian oil company grew to over 40% yield during 2022 but recent politcal events may cause a reduction in dividend

10 best oil stocks

Here’s a list of 10 best oil stocks to consider for your investment portfolio:

  1. Exxon Mobil Corporation (XOM)
  2. Chevron Corporation (CVX)
  3. Suncor Energy Inc. (SU)
  4. Canadian Natural Resources Limited (CNQ)
  5. Enbridge Inc. (ENB)
  6. ConocoPhillips (COP)
  7. EOG Resources, Inc. (EOG)
  8. Pioneer Natural Resources Company (PXD)
  9. Cenovus Energy Inc. (CVE)
  10. TC Energy Corporation (TRP)

Undervalued oil stocks

Undervalued oil stocks offer potential growth opportunities at a lower price point. Identifying undervalued stocks requires thorough research and analysis of a company’s financials, growth prospects, and market conditions. Some investors use valuation metrics such as price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and price-to-book (P/B) ratio to identify undervalued oil stocks. It’s essential to perform due diligence and assess the risks involved before investing in undervalued stocks.

6. Conclusion

The oil industry remains an important part of the global economy, providing energy for transportation, manufacturing, and other critical sectors. While there are risks and uncertainties associated with investing in oil stocks, there are also opportunities for potential gains and dividends.

By carefully analyzing individual companies and keeping an eye on market trends and geopolitical risks, investors can make informed decisions about which oil stocks to add to their portfolios. Whether seeking short-term profits or long-term growth, there are plenty of options available for those interested in investing in the oil industry.


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