12 Hot Oil Stocks to Buy According to Hedge Funds

3. EOG Resources, Inc. (NYSE:EOG)

Gain Over Past 12 Months: 21.3%

Number of Hedge Fund Holders: 46

EOG Resources, Inc. (NYSE:EOG) explores, develops, produces, and markets natural gas and crude oil. Founded in 1985, the company has operations in the US, Canada, the UK, Trinidad, China, and other international segments.

One of the most appealing aspects of EOG Resources, Inc. (NYSE:EOG) is its robust balance sheet. While the E&P sector is known for carrying high levels of debt, EOG is known to manage its debt levels very efficiently and return significant value to its shareholders. Over the last four years, the company has generated more than $22 billion in free cash flow and more than $25 billion in adjusted net income. The oil and gas producer also increased its regular dividend rate by 160% during the period and has paid or committed to pay more than $13 billion directly to shareholders through dividends and $3.2 billion indirectly through share repurchases, all while also reducing debt by 35%.

EOG Resources, Inc. (NYSE:EOG) has never reduced or suspended its regular dividends since it started paying them 27 years ago. The company has also recently announced plans to potentially return 100% or more of its free cash flow to shareholders in the near to medium term. EOG boosted its share buyback program by $5 billion at the end of Q3 2024 after beating profit estimates and stated that it would raise its debt balance to a range of $5 to $6 billion in the next 12 to 18 months, which would make additional cash available for investor payouts.

EOG Resources, Inc. (NYSE:EOG) is also well-positioned to take advantage of the growing gas demand in the US. The company’s Janus gas plant in the Delaware Basin is expected to be completed this year, while its Verde pipeline is already online, allowing EOG to access the Gulf Coast market.

Shares of EOG Resources, Inc. (NYSE:EOG) were held by 46 hedge funds in the IM database at the end of Q3 2024, with a total stake value of $836.45 million, up 45.2% from the previous quarter.