In this article, we will take a look at the 5 best fuel stocks to buy now. To read our analysis of the recent industry trends, and market activity, you can go to the 10 Best Fuel Stocks to Buy Now.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 57
Devon Energy Corporation (NYSE:DVN) is a leading oil and gas producer based in Oklahoma with a multi-basin portfolio underpinned by world-class Delaware Basin position.
On September 28, Devon Energy Corporation (NYSE:DVN) completed its previously announced bolt-on acquisition of Validus Energy, an Eagle Ford operator, for a total cash consideration of $1.8 billion. The acquisition adds 42,000 net acres of premier acreage position to the portfolio with current production of approximately 35,000 barrels of oil equivalent per day.
In August, the board of directors of Devon Energy Corporation (NYSE:DVN) declared a total dividend of $1.55 per share for the second quarter. Its shares currently have a dividend yield of 6.48%, significantly higher than the average dividend yield of the S&P 500 index.
On October 21, Citi analyst Scott Gruber raised the price target on Devon Energy Corporation (NYSE:DVN) shares to $80 from $77 and maintained a ‘Buy’ rating for the shares.
As of Q2 2022, 57 of the 895 hedge funds tracked by Insider Monkey owned shares of Devon Energy Corporation (NYSE:DVN), valued at $1.7 billion. Its largest shareholder was Rajiv Jain’s GQG Partners with ownership of 14.9 million shares valued at $822 million.
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 59
San Ramon, California-based Chevron Corporation (NYSE:CVX) is one of the world’s leading integrated energy companies. It produces crude oil and natural gas, and manufactures transportation fuels, lubricants, petrochemicals, and additives.
In June, Chevron Corporation (NYSE:CVX) announced that it had completed the previously announced acquisition of Renewable Energy Group, Inc. (NASDAQ:REGI) in an all-cash transaction valued at $3.15 billion. The acquisition is expected to support Chevron’s goal to increase renewable fuels production capacity to 100,000 barrels per day by 2030.
Chevron Corporation (NYSE:CVX) has a history of regular quarterly dividends dating back to more than 30 years. In July, its board of directors declared a quarterly dividend of $1.42 per share. Its shares had a dividend yield of 3.38%.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of Chevron Corporation (NYSE:CVX) shares with a ‘Hold’ rating and a $171 price target for the shares.
According to the Insider Monkey data on 895 leading hedge funds, 56 hedge funds were long Chevron Corporation (NYSE:CVX) shares as of Q2 2022, with the total shares held by hedge funds valued at $26.0 billion. Warren Buffett’s Berkshire Hathaway was the largest hedge fund shareholder with ownership of 161.4 million shares valued at $23.4 billion.
3. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 66
Based in Houston, Texas, Occidental Petroleum Corporation (NYSE:OXY) is an international energy company with assets primarily in the United States, the Middle East, and North Africa.
Occidental Petroleum Corporation (NYSE:OXY) has focused on strengthening its balance sheet in the recent past. As part of this plan, the company repaid $4.8 billion of debt during Q2 2022, representing 19% of total outstanding principal.
On October 19, Barclays analyst Jeanine Wai raised the price target on Occidental Petroleum Corporation (NYSE:OXY) shares to $84 from $75 and maintained an ‘Overweight’ rating on the shares.
As of Q2 2022, 66 of the 895 hedge funds tracked by Insider Monkey held Occidental Petroleum Corporation (NYSE:OXY) shares valued at $13.8 billion. Warren Buffett’s Berkshire Hathaway was its biggest shareholder with ownership of 158.5 million shares valued at $9.3 billion.
During the third quarter of 2022, Berkshire Hathaway acquired further shares of Occidental Petroleum Corporation (NYSE:OXY) which brings the total number of shares owned by the investment company to 194.4 million, representing a 20.9% stake in the company. There is potential for the acquisition of all outstanding equity of the company by Warren Buffett which offers an M&A arbitrage opportunity.
2. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 71
Houston, Texas-based ConocoPhillips (NYSE:COP) is one of the world’s leading exploration and production companies with operations and activities in 13 countries. It had proven oil and gas reserves of 6.1 billion barrels of oil equivalent, as of December 31, 2021.
In March, ConocoPhillips (NYSE:COP) completed the sale of its Indonesia assets MedcoEnergi for $1.355 billion, as part of its strategy to focus on opportunities with low supply cost. The company has also recently expanded its global LNG portfolio through participation in Qatar Energy’s North Field East LNG project and an agreement with Sempra Infrastructure.
Apart from investing in future growth, ConocoPhillips (NYSE:COP) has also strengthened its balance sheet through its $5 billion debt reduction target. In addition, the company recently announced a $5 billion increase in 2022 return of capital plan to $15 billion and declared a quarterly dividend of $0.46 per share and a variable dividend of $1.40 per share.
On October 19, Jefferies analyst Lloyd Byrne initiated coverage of ConocoPhillips (NYSE:COP) shares with a $143 price target and a ‘Buy’ rating for the shares.
As of Q2 2022, 71 of the 895 hedge funds tracked by Insider Monkey were long ConocoPhillips (NYSE:COP), holding shares worth $2.4 billion. Ken Fisher’s Fisher Asset Management was the largest shareholder with ownership of 6.8 million shares valued at $607 million.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 72
Irving, Texas-based Exxon Mobil Corporation (NYSE:XOM) is one of the largest publicly traded international energy and petrochemical companies. It is one of the largest integrated fuels, lubricants, and chemical companies in the world.
Exxon Mobil Corporation (NYSE:XOM) has a long history of dividend payments and its payouts have grown at an average annual rate of 6.0% over the last 39 years. In July, the company declared a cash dividend of $0.88 per share for the third quarter. Its shares currently have a dividend yield of 3.39%.
On October 18, Jefferies analyst Lloyd Byrne assumed coverage of Exxon Mobil Corporation (NYSE:XOM) and upgraded the rating on its shares to ‘Buy’ from ‘Hold’, with a price target of $133, up from $90. The analyst believes that high commodity prices and the company’s investments throughout the cycle position it for growth in the Upstream and Downstream segments.
As of Q2 2022, Exxon Mobil Corporation (NYSE:XOM) was the most sought-after energy stock among hedge funds on our list of 10 best fuel stocks to buy now, as 72 of the elite hedge funds tracked by Insider Monkey held its shares, valued at $7.4 billion. Rajiv Jain’s GQG Partners was its largest hedge fund shareholder with ownership of 47.5 million shares valued at $4.1 billion.
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