In this article, we discuss the 5 best energy stocks to buy now. If you want to read our detailed analysis, the risk/reward, and methodology of this list, go directly to the 10 Best Energy Stocks to Buy Now.
5. Chevron Corporation (NYSE:CVX)
No. of Hedge Fund Holders: 59
Chevron Corporation (NYSE:CVX) is an energy corporation active in more than 180 countries. It produces and markets a variety of high-quality refined products, such as gasoline, diesel, marine, and aviation fuels, finished lubricants, and fuel oil additives. About 11,000 oil and gas wells in the Permian Basin are operated by the company in the United States.
Given its scale, Chevron Corporation (NYSE:CVX) has been consistently profitable despite economic challenges. As a result of its profitability, the company has a strong dividend history and has raised its dividend every year for the last 35 years. As of September 8, the company also has a dividend yield of 3.28% and pays a quarterly dividend of $1.42 per share.
Many hedge funds like the stock. According to the second quarter database of Insider Monkey, 59 hedge funds were bullish on Chevron Corporation (NYSE:CVX), with combined stakes worth about $26 billion. Berkshire Hathaway is the biggest stakeholder of Chevron Corporation (NYSE:CVX) as of the second quarter of 2022, with more than 161 million shares worth more than $23 billion.
4. Schlumberger Limited (NYSE:SLB)
No. of Hedge Fund Holders: 64
Schlumberger Limited (NYSE:SLB) serves the oil and gas sector. It provides technology for reservoir characterization, production, drilling, and processing.
On July 27, Benchmark analyst Douglas Becker upgraded Schlumberger Limited (NYSE:SLB) stock from Hold to Buy rating with a price target of $55. The analyst anticipates that the business would achieve its 25% EBITDA margin objective one quarter earlier, in the third quarter of 2023.
As of September 6, 2022, First Eagle Investment Management is the largest shareholder in Schlumberger Limited (NYSE:SLB) in our database and holds a stake worth more than $968 million. The investment covers 2.73% of First Eagle Investment Management’s 13F portfolio.
3. Occidental Petroleum Corporation (NYSE:OXY)
No. of Hedge Fund Holders: 66
Occidental Petroleum Corporation (NYSE:OXY), headquartered in Houston, is an American company engaged in hydrocarbon exploration. The company’s subsidiary, Oxy Low Carbon Ventures (OLCV), is developing cutting-edge technologies and commercial solutions that increase profitably while cutting emissions.
Recently, Occidental Petroleum Corporation (NYSE:OXY) and its affiliate 1PointFive declared plans to start engineering and building a Direct Air Capture plant in Ector County, Texas. The initial DAC facility will be the biggest of its kind upon completion. As of September 8, the firm now pays a quarterly dividend of $0.13 per share, for a yield of 0.8%.
Some analysts have high hopes for the company’s prospects in the future owing to its strong business model in carbon management. On September 6, Morgan Stanley analyst Devin McDermott kept an Equal Weight rating on Occidental Petroleum Corporation (NYSE:OXY) stock and raised his price target to $70 from $76.
As per Insider Monkey’s Q2 2022 database, 66 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY). The stakes owned by these hedge funds are valued at over $13.8 billion.
Smead Capital Management mentioned Occidental Petroleum Corporation (NYSE:OXY) in its second-quarter 2022 investor letter, here is what the firm had to say:
“For the quarter, our best-performing stocks were Continental Resources (CLR), Merck (MRK) and Occidental Petroleum Corporation (NYSE:OXY). Despite a steep sell-off in June in the oil and gas stocks, two of our oil stocks made the quarterly list.If you are wondering how we are outperforming the S&P 500 Index in the first half of the year, look no further than our top three performers. Occidental Petroleum (OXY), Continental Resources (CLR) and Conoco Phillips (COP) soared in value and were barely represented in the S&P 500 Index. To quote Jerry Jones, owner of the Dallas Cowboys, “We are in the first quarter on higher energy prices!”
2. ConocoPhillips (NYSE:COP)
No. of Hedge Fund Holders: 71
ConocoPhillips (NYSE:COP), headquartered in Houston, Texas, is a multinational corporation involved in the production and exploration of hydrocarbons. The company improved its portfolio and financial structure by purchasing Concho Resources and Shell Permian in 2021.
As a result, ConocoPhillips (NYSE:COP) enjoys economies of scale and profits. With the higher energy prices, ConocoPhillips (NYSE:COP) had strong Q2 results with normalized EPS of $3.91, beating analyst estimates by $0.06.
With a forward P/E of 7.73, the energy stock could rise if the company continues to grow and energy prices remain high.
When looking at the institutional investors followed by Insider Monkey at the end of Q2, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in ConocoPhillips (NYSE:COP). Fisher Asset Management has over $600 million position in the stock, comprising 0.42% of its 13F portfolio.
1. Exxon Mobil Corporation (NYSE:XOM)
No. of Hedge Fund Holders: 72
Exxon Mobil Corporation (NYSE:XOM) is an oil and gas company. Exxon Corporation and Mobil Corporation joined together to form the company in 1999 and ever since then, the company has been very profitable. With the higher oil prices, the company earned $23 billion and it could earn even more in 2022 if analyst estimates are correct.
With 72 hedge funds in our database holding positions at the end of Q2, 2022, Exxon Mobil Corporation (NYSE:XOM) also ranks #1 on our list of 10 best energy stocks to buy now. Among them, GQG Partners is the biggest stakeholder of Exxon Mobil Corporation (NYSE:XOM) as of the second quarter of 2022, with more than 47 million shares worth more than $4 billion.
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