Top 10 Oil and Gas Stocks To Invest In

Published September 22, 2021 at 9:48 am EDT Updated September 7, 2026 at 12:59 pm EDT

In this article, we discuss the top 10 oil and gas stocks to invest in.

Oil stocks soared in the last week due to higher oil prices. West Texas Intermediate (WTI), one of the global oil benchmarks, rose 3.3% to $72.78 per barrel on September 15 and has risen 90% in the last year. With the ramped-up COVID-19 vaccinations and a gradual lifting of lockdown measures, Wall Street analysts anticipate crude markets have the ability to rise considerably higher in the coming months.

In addition, oil and gas companies are leading to a solid recovery, with oil prices rising more than 45% this year as a result of the ongoing economic recovery and massive production cuts by the Organization of Petroleum Exporting Countries (OPEC) and its non-OPEC allies. Investors see the rise in oil prices as an opportunity to enter and profit from the stock market. Oil giants Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX) are among the largest oil and gas companies in the world by market capitalization. These oil behemoths are popular among investors.

The continuous oil price hike is supported by the increasing demand for oil and gas globally with travel restrictions slowly easing. According to OPEC’s monthly oil market report released in September, oil demand in 2022 is expected to surpass pre-pandemic levels at 100.8 mb/d, up from the global oil demand average of 96.7 mb/d in 2021.

Among the biggest oil and gas gainers in the recent weeks are EOG Resources, Inc. (NYSE:EOG), Marathon Oil Corporation (NYSE:MRO), Devon Energy Corporation (NYSE:DVN), and Exxon Mobil Corporation. Houston-based oil and gas company EOG Resources, Inc. (NYSE:EOG) climbed 10.59% in the last five days while Marathon Oil Corporation (NSYE: MRO) and Devon Energy Corporation (NYSE:DVN) jumped 6.48% and 6.13%, respectively. On the other hand, shares of Exxon Mobil Corporation increased 2.18% in the last five days.

Among the oil and gas exchange-traded funds (ETFs) that are gaining traction recently is Energy Select Sector SPDR Fund (NYSEARCA:XLE), which has gained 3.20% in the last five days. Energy Select Sector SPDR Fund’s (NYSEARCA:XLE) holdings include Exxon Mobil Corporation, Chevron Corporation, Occidental Petroleum Corporation (NYSE:OXY), Devon Energy Corporation, and Marathon Oil Corporation (NSYE: MRO).

Photo by Jeff W on Unsplash

Our Methodology

The stocks on our list were picked based on their fundamentals and prospects for growth based on key business characteristics. We chose oil and gas stocks that have long-term growth prospects and high analyst ratings.

We ranked these stocks based on the number of hedge funds having stakes in them, based on our data of over 873 hedge funds.

Why should we pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Let’s now look at the top 10 oil and gas stocks to invest in.

Top Oil and Gas Stocks to Invest In

10. BP p.l.c. (NYSE:BP)

Number of Hedge Fund Holders: 30

We start our list of the top 10 oil and gas stocks to invest in with a London-based energy company BP p.l.c. (NYSE:BP). The company operates in the exploration and production of oil and gas and other petrochemical products. Additionally, BP p.l.c. (NYSE:BP) is involved in renewable energy generation, including solar and wind energy.

On September 16, Deutsche Bank analyst James Hubbard kept a Hold rating on BP p.l.c. (NYSE:BP) and raised his price target for the stock to 320 GBp from 313 GBp. BP plc (NYSE:BP) also announced a strategic partnership with oil and gas company Abu Dhabi National Oil Company (ADNOC) and renewable energy firm Masdar, to deliver sustainable energy solutions for the UK and UAE. Shares of BP plc (NYSE:BP) increased 3.02% in the past five days.

The company has a market cap of $84 billion. In the second quarter of 2021, BP p.l.c. (NYSE:BP) reported an EPS of $0.83, beating estimates by $0.23. The company’s revenue in the second quarter came in at $36.47 billion. The stock has gained 23%, year to date, and 29% in the past twelve months.

BP p.l.c. (NYSE:BP) currently pays an annual dividend of $1.31 per share and has a dividend yield of 5.19%.

At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $1.08 billion in BP p.l.c. (NYSE:BP), up from 29 in the previous quarter worth $1.24 billion.

Just like Exxon Mobil Corporation, Chevron Corporation, Devon Energy Corporation, Marathon Oil Corporation (NSYE: MRO), and EOG Resources, Inc., BP p.l.c. (NYSE:BP) is a good oil stock to invest in, according to market analysts.

9. Marathon Oil Corporation (NYSE:MRO)

Number of Hedge Fund Holders: 34

Marathon Oil Corporation is a Houston-based independent exploration and production company and it ranks ninth on the list of top 10 oil and gas stocks to invest in. The company was founded in 1887 and was formerly known as USX Corporation. Marathon Oil Corporation sells crude oil, natural gas, and natural gas liquids in the US.

On August 6, Scotiabank analyst Paul Cheng upgraded Marathon Oil Corporation to Outperform from Sector Perform and increased his price target for the stock to $18 from $15 previously. Marathon Oil Corporation shares have risen 6.48% in the last five days as oil prices have increased due to supply concerns caused by Hurricane Ida damage.

The company has a market cap of $9.4 billion. In the second quarter of 2021, Marathon Oil Corporation reported an EPS of $0.22, beating estimates by $0.04. The company’s revenue in the second quarter came in at $1.14 billion, up from $272 million in the second quarter of 2020, and beat revenue estimates by $25.77 million. The stock has gained 80%, year to date, and 156% in the past twelve months.

Marathon Oil Corporation currently pays an annual dividend of $0.20 per share and has a dividend yield of 1.67%.

At the end of the second quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $655 million in Marathon Oil Corporation, up from 29 in the previous quarter worth $423 million.

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

Number of Hedge Fund Holders: 35

EOG Resources, Inc. ranks eighth on the list of top 10 oil and gas stocks to invest in. EOG Resources, Inc. markets natural gas and crude oil. The Houston-based oil company has established operations in China, Oman, and the Republic of Trinidad and Tobago.

On September 13, Tudor Pickering analyst Matthew Portillo upgraded EOG Resources, Inc. to Buy from Hold with a price target of $82 per share.

The company has a market cap of $43 billion. In the second quarter of 2021, EOG Resources, Inc. reported an EPS of $1.73, beating estimates by $0.18. The company’s revenue in the second quarter was $4.14 billion, an increase of 276%year over year, and beat revenue estimates by $454.36 million. The stock has gained 49%, year to date, and 80% in the past twelve months.

EOG Resources, Inc. currently pays an annual dividend of $1.65 per share and has a dividend yield of 2.22%.

At the end of the second quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $411 million in EOG Resources, Inc., up from 30 in the previous quarter worth $596 million.

7. Valero Energy Corporation (NYSE:VLO)

Number of Hedge Fund Holders: 38

Valero Energy Corporation (NYSE:VLO) ranks seventh on the list of top 10 oil and gas stocks to invest in. The Texas-based oil and gas company manufactures and sells transportation fuel and petrochemical products. Valero Energy Corporation was founded in 1980 as Valero Refining and Marketing Company.

On September 16, Piper Sandler analyst Ryan Todd kept an Overweight rating on Valero Energy Corporation and set a $75 price target for the stock, noting that amidst a bumpy third quarter, the independent fuel company is well-positioned in the oil and gas market. Shares of Valero Energy Corporation climbed 3.45% in the past five days.

The company has a market cap of $26.8 billion. In the second quarter of 2021, Valero Energy Corporation reported an EPS of $0.48, beating estimates by $0.35. The company’s revenue in the second quarter was $27.75 billion, an increase of 166% year over year, and beat revenue estimates by $6 billion. The renewable diesel segment, which reported $248 million in operating income for the second quarter of 2021, compared to $129 million in the second quarter of 2020, was one of the segments that supported Valero Energy Corporation’s (NYSE:VLO) revenue growth in the second quarter. The stock has gained 16%, year to date, and 34% in the past twelve months.

Valero Energy Corporation is one of the oil and gas companies that offer a high yield of 5.98% and pays its shareholders an annual dividend of $3.92.

At the end of the second quarter of 2021, 38 hedge funds in the database of Insider Monkey held stakes worth $259 million in Valero Energy Corporation.

Along with Exxon Mobil Corporation, Chevron Corporation, Devon Energy Corporation, Marathon Oil Corporation (NSYE: MRO), and EOG Resources, Inc., Valero Energy Corporation is one of the leading oil and gas companies today.

6. Diamondback Energy, Inc. (NASDAQ:FANG)

Number of Hedge Fund Holders: 38

Diamondback Energy, Inc. (NASDAQ:FANG) ranks sixth on the list of top 10 oil and gas stocks to invest in. Diamondback Energy, Inc. is an independent oil and natural gas company based in Texas. Diamondback Energy, Inc.’s (NASDAQ:FANG) total acreage holding in the Permian Basin as of December 31, 2020 was approximately 449,642 gross acres, with working interests in 4,326 gross producing wells and royalty interests in 4,553 additional wells.

On September 16, Truist analyst Neal Dingmann kept a Buy rating on Diamondback Energy, Inc. and increased his price target for the stock to $130 from $122 previously. The analyst is optimistic about the company’s potential to create significant free cash flows in the fiscal year 2022, with a yield of above 20%. The stock has gained 10.10% in the past five days.

Shares of Diamondback Energy, Inc. climbed 4% pre-market on September 17 following the announcement of a $2 billion stock buyback program as it accelerates plans to return 50% of free cash flow to shareholders to Q4.

The company has a market cap of $15 billion. In the second quarter of 2021, Diamondback Energy, Inc. reported an EPS of $2.40, beating estimates by $0.20. The company’s revenue in the second quarter was $1.68 billion, up from $425 million in the second quarter of 2020, and beat revenue estimates by $350 million.

Diamondback Energy, Inc. recently increased its annual dividend by 12.5% to $1.80 per share. The company offers a dividend yield of 2.3%.

At the end of the second quarter of 2021, 38 hedge funds in the database of Insider Monkey held stakes worth $443 million in Diamondback Energy, Inc., up from 35 in the previous quarter worth $343 million.

Exxon Mobil Corporation, Chevron Corporation, Devon Energy Corporation, Marathon Oil Corporation (NSYE: MRO), EOG Resources, Inc., and Diamondback Energy, Inc. are some of the most popular oil and gas stocks favored by market analysts today.

Miller Value Partners, in their Q4 2020 Investor Letter, said Diamondback Energy, Inc. was added to their portfolio in the fourth quarter of 2020. Here is what the fund said:

“We also bought Diamondback Energy. For the first time in decades, we find the energy to be quite attractive. Companies are finally focusing on cash flow and returns. Diamondback is a low-cost shale producer that screened well on a number of metrics we pay attention to (dividend yield, free cash flow yield, discounted cash flow, and insider buying). They recently added ROIC to their management incentive compensation. They plan to continue to pay down debt and maintain the dividend. The company is obviously levered to increasing oil prices.”

5. Marathon Petroleum Corporation (NYSE:MPC)

Number of Hedge Fund Holders: 48

Marathon Petroleum Corporation (NYSE:MPC) is an Ohio-based downstream energy company and it ranks fifth on the list of top 10 oil and gas stocks to invest in. The company produces and sells refined transportation fuel, propylene, and aromatics. Marathon Petroleum Corporation also operates in the midstream oil and gas segment where it stores and transports refined products and crude oil.

In August, Marathon Petroleum Corporation joined a venture with Chicago-based crop trader Archer-Daniels-Midland Company (NYSE:ADM) to produce soybean oil. The resulting soybean oil will be supplied solely to Marathon Petroleum Corporation’s (NYSE:MPC) new renewable diesel facility, which is scheduled to open in 2023. Shares of Marathon Petroleum Corporation jumped 3.08% in the previous month.

On September 16, Piper Sandler analyst Ryan Todd kept an Overweight rating on Marathon Petroleum Corporation and increased his price target for the stock to $69 from $66. Meanwhile, the oil stock has gained 2.3% on August 10 after Goldman Sachs named Marathon Petroleum Corporation a top pick among oil refiners, highlighting the company’s distinguished capital returns profile.

The company has a market cap of $37 billion. In the second quarter of 2021, Marathon Petroleum Corporation reported an EPS of $0.67, beating estimates by $0.29. The company’s revenue in the second quarter was $29.83 billion and beat revenue estimates by $8.59 billion.

Marathon Petroleum Corporation has a dividend yield of 3.93% and pays its shareholders an annual dividend of $2.32 per share.

At the end of the second quarter of 2021, 48 hedge funds in the database of Insider Monkey held stakes worth $2.61 billion in Marathon Petroleum Corporation, up from 46 in the previous quarter worth $1.96 billion.

4. Devon Energy Corporation (NYSE:DVN)

Number of Hedge Fund Holders: 50

Devon Energy Corporation is an independent energy company based in Oklahoma that ranks fourth on the list of top 10 oil and gas stocks to invest in. Devon Energy Corporation operates in the exploration, production, and development of natural gas liquids, natural gas, and crude oil.

On August 3, Devon Energy Corporation increased its quarterly dividend by 245.5% to $0.38. The company has a forward yield of 5.8%. On September 9, Goldman Sachs maintained a Buy rating on Devon Energy Corporation with a price target of $36 per share, highlighting the oil company’s dividend strategy. Shares of Devon Energy Corporation climbed 6.13% in the past five days.

The company has a market cap of $20 billion. In the second quarter of 2021, Devon Energy Corporation reported an EPS of $0.60, beating estimates by $0.07. The company’s revenue in the second quarter was $2.42 billion and beat revenue estimates by $367.95 million. The company reported that oil production surpassed midpoint guidance in the second quarter, averaging 291,000 barrels per day.

At the end of the second quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $1.03 billion in Devon Energy Corporation, down from 52 in the previous quarter worth $1.46 billion.

GoodHaven Capital Management, in their Q4 2020 investor letter, mentioned former WPX Energy, now Devon Energy Corporation, and emphasized their views on the company. Here is what the fund said:

“After a rough start to the year our two biggest energy holdings – WPX Energy rebounded materially in the last six months though energy was still our biggest detractor for the year. I’ve previously written about deciding earlier this year to direct new capital towards better businesses versus adding more to the energy sector, but given the material optionality at WPX, we opted to maintain a material exposure. Recently WPX announced an all stock merger with a larger competitor – Devon Energy – which will leave the new company with plenty of cash flow at lower oil prices, less leverage, and material upside to higher commodity prices.”

3. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 50

ConocoPhillips (NYSE:COP) is a Houston-based oil and gas company and it ranks third on the list of top 10 oil and gas stocks to invest in. ConocoPhillips operates in the transportation, exploration, and production of natural gas, natural gas liquids, bitumen, and crude oil.

On August 24, investment firm Raymond James maintained a Strong Buy rating on ConocoPhillips with a price target of $80 per share. Shares of ConocoPhillips jumped 5.72% in the past five days.

The company has a market cap of $79 billion. In the second quarter of 2021, ConocoPhillips reported an EPS of $1.27, beating estimates by $0.14. The company’s revenue in the second quarter came in at $10.21 billion. The stock has gained 47%, year to date, and 63.3% in the past twelve months.

ConocoPhillips has a dividend yield of 2.92% and pays its shareholders an annual dividend of $1.72 per share.

At the end of the second quarter of 2021, 50 hedge funds in the database of Insider Monkey held stakes worth $1.15 billion in ConocoPhillips, down from 51 in the previous quarter worth $1.20 billion.

2. Occidental Petroleum Corporation (NYSE:OXY)

Number of Hedge Fund Holders: 57

Occidental Petroleum Corporation is a Houston-based energy company and it ranks second on the list of top 10 oil and gas stocks to invest in. The company operates in the exploration, production, and development of oil and gas in the US. In addition, Occidental Petroleum Corporation has established operations in Latin America, Africa, and the Middle East.

On August 30, Citi analyst Scott Gruber initiated a Buy rating and a $35 price target on Occidental Petroleum Corporation. Shares of Occidental Petroleum Corporation jumped 7.85% in the past five days.

The company has a market cap of $79 billion. In the second quarter of 2021, Occidental Petroleum Corporation reported an EPS of $0.32, beating estimates by $0.29. The company’s revenue in the second quarter came in at $6.01 billion and beat revenue estimates by $154.32 million.

Occidental Petroleum Corporation currently pays its shareholders an annual dividend of $0.04 per share and has a dividend yield of 0.15%.

At the end of the second quarter of 2021, 57 hedge funds in the database of Insider Monkey held stakes worth $3.62 billion in Occidental Petroleum Corporation, up from 52 in the previous quarter worth $3.41 billion.

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 68

Topping the list of top 10 oil and gas stocks to invest in is Exxon Mobil Corporation. The Texas-based oil giant was founded in 1870 and has since expanded into a variety of oil and gas areas, including upstream, downstream, and petrochemicals.

DZ Bank analyst Werner Eisenmann gave Exxon Mobil Corporation a Hold rating on August 3 with a price target of $62.50 per share. On the other hand, JPMorgan analyst Phil Gresh remains bullish on Exxon Mobil Corporation and kept a Buy rating with a price target of $65 per share on September 15.

The company has a market cap of $233 billion. In the second quarter of 2021, Exxon Mobil Corporation reported an EPS of $1.10, beating estimates by $0.11. The company’s revenue in the second quarter grew 108% year over year to $67.74 billion and beat revenue estimates by $3.02 billion. The stock has gained 33.8%, year to date, and 45.9% in the past twelve months.

At the end of the second quarter of 2021, 68 hedge funds in the database of Insider Monkey held stakes worth $3.69 billion in Exxon Mobil Corporation, up from 65 in the previous quarter worth $2.77 billion.

In the Q2 2021 investor letter of First Eagle Investment Management, the fund mentioned Exxon Mobil Corporation and discussed its stance on the firm. Here is what the fund said:

“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 peek at the 10 Healthcare Stocks to Buy According to Mario Gabelli and 10 Best Robinhood Stocks Under $20.

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