In this article, we discuss 5 oil stocks to buy amid the Ukraine crisis. If you want our detailed analysis of these stocks, go directly to 10 Oil Stocks To Buy Amid Ukraine Crisis.
5. Halliburton Company (NYSE:HAL)
Number of Hedge Fund Holders: 43
Halliburton Company (NYSE:HAL) is a Texas-based multinational corporation that operates as a leading oil field service company, owning multiple subsidiaries across more than 70 countries.
On January 24, Halliburton Company (NYSE:HAL) declared a $0.12 per share quarterly dividend, a 166.7% increase from its prior dividend of $0.045. The dividend is payable on March 23, to shareholders of record on March 2.
Publishing its Q4 earnings on January 24, Halliburton Company (NYSE:HAL) reported above market consensus figures for EPS and revenue. Halliburton Company (NYSE:HAL)’s per share earnings came in at $0.36, and revenue for the period was $4.28 billion.
RBC Capital analyst Keith Mackey on January 25 raised the price target on Halliburton Company (NYSE:HAL) to $34 from $32 and kept an Outperform rating on the shares. The company’s Q4 results topped expectations on most key metrics, and Halliburton Company (NYSE:HAL) increased its dividend earlier than expected. This reflects the management’s confidence in its ability to expand its margins while controlling capital expenditures throughout the cycle, the analyst told investors in a bullish thesis.
Pzena Investment Management held the largest Halliburton Company (NYSE:HAL) stake in Q4 2021, with 38.6 million shares worth $883.35 million. Overall, 43 hedge funds were bullish on Halliburton Company (NYSE:HAL), up from 29 funds in the quarter earlier.
4. Diamondback Energy, Inc. (NASDAQ:FANG)
Number of Hedge Fund Holders: 45
Headquartered in Midland, Texas, Diamondback Energy, Inc. (NASDAQ:FANG) is engaged in hydrocarbon exploration and the distribution of petroleum, natural gas, and natural gas liquids.
Diamondback Energy, Inc. (NASDAQ:FANG)’s Q4 results came in on February 22, and the company posted earnings per share of $3.63, exceeding estimates by $0.27. Diamondback Energy, Inc. (NASDAQ:FANG)’s revenue gained approximately 163% year-on-year, reaching $2.02 billion, surpassing estimates by $339.49 million.
On February 22, Diamondback Energy, Inc. (NASDAQ:FANG) declared a $0.60 per share quarterly dividend, a 20% increase from its prior dividend of $0.50. The dividend will be paid on March 11, to shareholders of record on March 4.
TD Securities analyst Menno Hulshof on February 23 raised the price target on Diamondback Energy, Inc. (NASDAQ:FANG) to $150 from $140 and kept a Buy rating on the shares following the “solid beat” in Q4. The analyst considers current share levels an attractive entry point for a “Permian pure-play with a peer-leading cost structure, and a strong commitment to returning at least” 50% of free cash flow.
Among the hedge funds tracked by Insider Monkey, 45 funds reported owning stakes in Diamondback Energy, Inc. (NASDAQ:FANG) in Q4 2021, with combined stakes amounting to $572.40 million. Harris Associates is the largest Diamondback Energy, Inc. (NASDAQ:FANG) stakeholder, with a $328 million position in the company.
Here is what Miller Opportunity Equity has to say about Diamondback Energy, Inc. (NASDAQ:FANG) in its Q4 2021 investor letter:
“Diamondback Energy (FANG) returned 14.4% in the quarter as oil price rose and fell during the quarter ending the period largely in the same place that it started. The company reported strong 3Q results beating on the top and bottom line. The company reported revenue of $1.9B beating consensus of $1.5B with EPS of $2.94 beating expectations for $2.79. The beat was driven by a combination of higher volumes, higher realizations, and efficiency gains. The company increased its total production guidance for the year to 370-372mboe/d1 (up from 363-370mboe/d) while lowering Capital Expenditure (CAPEX) guidance for the second time this year to $1.49-1.53B. The company raised the dividend for the third time this year to $2/share annually while authorizing a new $2B share repurchase program. Starting in 4Q21, the company plans to return 50% of Free Cash Flow to shareholders through the base dividend and a combination of buybacks and special dividends. Finally, the CEO Travis Stice announced plans to reduce methane emissions by 70% as part of the firm’s ESG initiative.”
3. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX), a successor of Standard Oil, is a multinational American producer of oil, gasoline, natural gas, and other petrochemicals. The stock has gained roughly 39% in the last six months, and the company posted a Q4 revenue of $48.13 billion, up 90.64% year-on-year, outperforming market consensus.
Chevron Corporation (NYSE:CVX) on January 26 declared a $1.42 per share quarterly dividend, a 6% increase from its prior dividend of $1.34. The dividend will be paid on March 10, to shareholders of record on February 16.
On February 23, Chevron Corporation (NYSE:CVX) unveiled a pilot project with Project Canary to lower and independently certify methane emissions at five oil well sites in Texas and Colorado.
Cowen analyst Jason Gabelman raised the price target on Chevron Corporation (NYSE:CVX) on February 23 to $140 from $133 and kept an Outperform rating on the shares. The analyst expects Chevron Corporation (NYSE:CVX)’s upcoming analyst day to deliver updated guidance and an update on TCO which is its largest project and it remains a top pick.
Warren Buffett’s Berkshire Hathaway is the biggest Chevron Corporation (NYSE:CVX) stakeholder as of Q4 2021, with 38.2 million shares worth $4.4 billion. Overall, 53 hedge funds were bullish on Chevron Corporation (NYSE:CVX), up from 51 funds in the prior quarter.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation (NYSE:CVX) in its Q3 2021 investor letter:
“After successfully replacing 25% of Exxon’s board of directors despite owning just 0.02% of the outstanding equity, Engine No. 1, the climate-focused activist hedge fund, met with Chevron’s management late last summer. In discussions that were later described as “cordial,” Chevron executives shared their plan to reduce carbon emissions. Subsequently, Chevron announced new plans to further reduce carbon output, along with their intention to appoint a new director with “environmental expertise.” Although it remains unclear exactly what Engine No. 1 is planning, rumors suggest the fund has contacted other investors, strongly suggesting they intend to launch a second campaign in the not-too-distant future.
What should Chevron expect?
It was recently reported by The Wall Street Journal that Exxon was considering abandoning two massive natural gas projects: the 75 trillion cubic foot (tcf ) Rovuma LNG project (capital cost $30 bn) and the 5 tcf Ca Voi Xanh offshore-Vietnam gas project (capital cost $10 bn). Exxon board members (most likely including the three supported by Engine No. 1) have publicly expressed concerns about both projects. According to internal reports, these projects are among the highest CO2 producers in Exxon’s pipeline; it is no surprise these projects have been called into question. However, we find the plight of both fields to be perplexing since production would almost certainly be used to displace coal in electricity generation, cutting CO2 emissions by nearly 50%. This fact seems to be lost on the new Exxon board members.”
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 58
Occidental Petroleum Corporation (NYSE:OXY)’s oil and gas operations are concentrated in the United States, the Middle East, and Colombia. Occidental Petroleum Corporation (NYSE:OXY) is also a manufacturer of petrochemicals.
In its Q4 earnings guidance, published on February 24, Occidental Petroleum Corporation (NYSE:OXY)’s consensus EPS estimate is $1.10 versus a loss per share of $0.78 in the prior-year quarter, and the consensus revenue estimate came in at $7.39 billion, as compared to $3.35 billion last year.
On January 31, Barclays analyst Jeanine Wai raised the price target on Occidental Petroleum Corporation (NYSE:OXY) to $44 from $40 and kept an Overweight rating on the shares. The analyst forecasts a relatively in-line quarter on the numbers for Occidental Petroleum Corporation (NYSE:OXY). The company is in a good position to discuss a framework for outsized cash returns alongside earnings, Wai told investors in a research note.
According to the Q4 database of Insider Monkey, 58 hedge funds were long Occidental Petroleum Corporation (NYSE:OXY), with collective stakes valued at $3.8 billion. Icahn Capital LP is the biggest stakeholder of the company, with 45 million shares worth $1.30 billion.
Here is what Smead Capital Management has to say about Occidental Petroleum Corporation (NYSE:OXY) in its Q3 2021 investor letter:
“Oil stocks dominated our winners for the quarter. We showed that we have unlimited ability to tempt fate by buying into Occidental Petroleum (OXY) this year after it was our biggest loser of 2020. It gained 16.64% during the third quarter.”
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 71
Exxon Mobil Corporation (NYSE:XOM) is a multinational oil and gas corporation headquartered in Irving, Texas. Amid rising oil prices, Exxon Mobil Corporation (NYSE:XOM) has fared well, with the stock gaining close to 39% in the last six months.
Exxon Mobil Corporation (NYSE:XOM) posted on February 1 its Q4 earnings, announcing an above consensus EPS of $2.05. Revenue for the quarter jumped 82.56% from year-over-year to approximately $85 billion, exceeding estimates by $6.24 billion.
On January 26, Exxon Mobil Corporation (NYSE:XOM) declared a quarterly dividend of $0.88 per share, to be paid on March 10 for shareholders of record on February 10. Barclays analyst Jeanine Wai raised the price target on Exxon Mobil Corporation (NYSE:XOM) to $91 from $73 and kept an Overweight rating on the shares on February 9.
Among the hedge funds monitored by Insider Monkey, 71 funds were bullish on Exxon Mobil Corporation (NYSE:XOM), up from 64 funds in the prior quarter. Rajiv Jain’s GQG Partners held the leading stake in the company, with 32.3 million shares worth approximately $2 billion.
Here is what First Eagle Investment Management has to say about Exxon Mobil Corporation (NYSE:XOM) in its Q2 2021 investor letter:
“Leading contributors in the First Eagle Global Fund this quarter included Exxon Mobil Corporation. The continued recovery in oil prices as economies reopen helped fuel another strong performance across the energy complex, including shares of Exxon Mobil. Exxon Mobil recently lost a proxy fight with an activist investor that took three of the company’s 12 board seats. While the press was focused on the investor’s concerns over Exxon Mobil’s long term energy transformation strategy, other factors fundamental to shareholder returns—like capital discipline and balance sheet management—were also at play.”
You can also take a look at 10 Best Stocks to Buy According to Warren Buffett and 10 Best Robinhood Stocks To Buy Right Now.
