1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 86
Topping our list of the Best Energy Stocks According to Hedge Funds is Exxon Mobil Corporation (NYSE:XOM) – a multinational oil, gas, and chemicals company with an extensive portfolio of products including crude oil, for refining into petroleum derivates; natural gas; refined fuels, like gasoline, diesel, jet fuel, and heating oil; and motor oil and industrial lubricants. With operations in more than 60 countries around the globe, the oil major’s competitive edge stems from its diversified world-class asset portfolio.
In Q3 of 2023, Exxon Mobil Corporation (NYSE:XOM) reported revenue of $90.02 billion, surpassing analysts’ estimates by $1.66 billion. The company also achieved an operating cash flow of $17.6 billion, with its free cash flow at $11.3 billion. Over three years, XOM’s stock boasts a remarkable performance compared to its peers and has given more than twice as much shareholder returns as the next big competitor.
Exxon Mobil Corporation (NYSE:XOM) also returned $26.1 billion to its shareholders in the form of dividends and share repurchases in Q3, with plans to repurchase over $19 billion of shares by the end of the year. Moreover, the oil and gas giant offers a quarterly dividend of $0.99 per share, having raised it by 4% in November this year. Exxon has increased its annual dividend for 42 consecutive years, a claim that less than 4% of the S&P 500 companies can make, putting it on our list of Dividend Knights that Beat the Market Last 3 Years.
In May, Exxon Mobil Corporation (NYSE:XOM) announced the acquisition of Pioneer Natural Resources in a massive $59.5 billion all-stock deal. The venture seems to be bearing fruit as the company has used it to offset the effect of the decline in average oil prices during the quarter, registering the first impact of the new asset.
Additionally, to ensure its smooth energy transition, Exxon Mobil Corporation (NYSE:XOM) has secured the largest offshore carbon dioxide storage site in the US through an agreement with the Texas General Land Office. The 271,000-acre site complements the company’s onshore carbon storage portfolio and further solidifies it as the company of choice for carbon capture, transport, and storage across the American Gulf Coast.
86 hedge funds in the IM database held shares of Exxon Mobil Corporation (NYSE:XOM) at the end of Q3 2024, with a total stake value of over $6.9 billion, up 11.7% from the previous quarter.
Overall, Exxon Mobil Corporation (NYSE:XOM) ranks first on our list of the best oil and gas energy stocks. While we acknowledge the potential for XOM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than XOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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