In this article, we discuss the top 5 oil and gas stocks to invest in. If you want to read our detailed analysis of these stocks, go directly to the Top 10 Oil and Gas Stocks To Invest In.
5. Devon Energy Corporation (NYSE:DVN)
Number of Hedge Fund Holders: 51
Devon Energy Corporation (NYSE:DVN) is an Oklahoma-based independent energy company. Devon Energy Corporation (NYSE:DVN) estimated proved reserves on a pro forma basis increased 15% to 1.6 billion Boe at year-end 2021 in their Q4 earnings report. In the fourth quarter of 2021, the company’s total production averaged 611,000 oil-equivalent barrels (Boe) per day, surpassing guidance by 3% due to high-margin production growth in the Delaware Basin, the company’s largest asset.
According to the Q4 13F data tracked by Insider Monkey, Rajiv Jain’s GQG Partners is the biggest shareholder in Devon Energy Corporation (NYSE:DVN). During the fourth quarter, the hedge fund increased its investment in Devon Energy Corporation (NYSE:DVN) by 5%, bringing its total stake to $639 million.
At the end of the fourth quarter of 2021, 51 hedge funds in the database of Insider Monkey held stakes worth $1.74 billion in Devon Energy Corporation (NYSE:DVN), up from 48 the previous quarter worth $1.4 billion.
4. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX), one of the biggest integrated oil and gas companies in the world, operates in the exploration and production, transportation, and refining of petroleum products. The California-based oil giant also markets lubricants, chemicals, and additives globally.
The company reported a $5.1 billion profit and $48.13 billion in total sales and other income in its fourth-quarter earnings report, which was released in January. Chevron Corporation’s (NYSE:CVX) net oil-equivalent production reached a new high of 3.10 million barrels per day in 2021. In addition, the company also added 1.3 billion barrels of net oil-equivalent proved reserves last year.
Chevron Corporation (NYSE:CVX) is one of the top oil and gas stocks to buy now because of its track record of growing dividends. The oil giant hiked its quarterly dividend by 6% to $1.42 per share in January, making it the 35th year in a row that the annual dividend payout has been increased by the company. As of the third week of February, shares of Chevron Corporation (NYSE:CVX) jumped 5.98% in the previous month.
As of the end of December 2021, Warren Buffett’s Berkshire Hathaway is the biggest shareholder of Chevron Corporation (NYSE:CVX), owning over 38.2 million shares of the oil company worth $4.49 billion. Berkshire Hathaway increased its position in Chevron Corporation (NYSE:CVX) by 34% in the fourth quarter of 2021, according to Insider Monkey’s recently published Q4 13F filing.
Here is what Goehring & Rozencwajg Associates has to say about Chevron Corporation 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 publically 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 the 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.”
3. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 56
ConocoPhillips (NYSE:COP) is a Houston-based energy firm that engages in the exploration and production of oil and natural gas in over 14 countries across North America, Europe, and Asia. ConocoPhillips (NYSE:COP)production including Libya averaged 1,567 MBOED for the fiscal year ended December 31, 2021, with proved reserves totaling 6.1 BBOE.
ConocoPhillips (NYSE:COP) announced in December that it had completed its $9.5 billion acquisition of the 225,000 net acres asset from Shell Enterprises LLC’s prolific Delaware Basin. As of the third week of February, the stock gained 23% in the past three months.
On February 11, Mizuho analyst Vincent Lovaglio maintained his Buy rating on ConocoPhillips (NYSE:COP) and raised his price target for the oil stock to $115 from $98. Lovaglio remains bullish on exploration and production and the industry as a whole, claiming that energy scarcity is driving strip oil prices well above the firm’s price roof through 2023. At the end of the fourth quarter of 2021, 56 hedge funds in the database of Insider Monkey held stakes worth $1.55 billion in ConocoPhillips (NYSE:COP), up from 49 in Q3 2021 worth $1.37 billion.
ClearBridge Investments, in its Q3 2021 investor letter, mentioned ConocoPhillips (NYSE:COP) and discussed its stance on the firm. Here is what the fund said:
“We also seized the opportunity to add to our position in energy producer ConocoPhillips at what we considered an attractive valuation. The market rewarded this move late in the quarter after ConocoPhillips announced its purchase of Permian Basin assets from Shell, making the company the second-largest oil and gas producer in the contiguous U.S. We view this as a positive strategic transaction for a well-run, ESG-cognizant oil producer. With this and prior transactions, the company continues to press its cost advantage and is well-positioned to benefit from ongoing energy demand recovery to pre-pandemic levels.”
2. Occidental Petroleum Corporation (NYSE:OXY)
Number of Hedge Fund Holders: 58
Occidental Petroleum Corporation (NYSE:OXY) is a Houston-based energy company with operations worldwide including Latin America, Africa, and the Middle East. Occidental Petroleum Corporation (NYSE:OXY) is involved in oil and gas property exploration and development, chemical manufacturing, midstream, and marketing of oil and gas products.
In the third quarter of 2021, the company’s revenue came in at $6.82 billion, an increase of 108% year over year, and beating revenue estimates by $247 million. Market analysts are also optimistic about the company’s future growth. On January 31, Barclays analyst Jeanine Wai increased her price target for Occidental Petroleum Corporation (NYSE:OXY) to $44 from $40 and kept her Overweight rating on the stock. In a research note, Wai tells investors that Occidental Petroleum Corporation (NYSE:OXY) is in a good position to consider a structure for outsized cash returns alongside earnings.
At the end of the fourth quarter of 2021, 58 hedge funds were bullish on Occidental Petroleum Corporation (NYSE:OXY), with total stakes amounting to $3.87 billion, compared to 60 funds the previous quarter.
Here is what Smead Capital Management has to say about Occidental Petroleum Corporation 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 the second-largest oil and gas company in the world with a market cap of $328 billion as of February 21. The oil giant is among the top oil and gas stocks to invest in according to market analysts and hedge funds. According to the fourth quarter database of Insider Monkey, 71 hedge funds held long positions in Exxon Mobil Corporation (NYSE:XOM), up from 64 funds in the prior quarter.
GQG Partners held the biggest stake in Exxon Mobil Corporation (NYSE:XOM) in Q4 2021, with over 32 million shares worth $1.98 billion. On February 9, Barclays maintained an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) and increased its price target for the stock to $91 from $73.
Exxon Mobil Corporation (NYSE:XOM) is being closely watched by investors owing to its excellent financial position. The company’s sales in the fourth quarter of 2021 were $84.97 billion, up 85% from the previous year. Furthermore, in 2021, the diversified oil major earned $48 billion in operating cash flow, the highest level since 2012. As of February 21, shares of Exxon Mobil Corporation (NYSE:XOM) are up nearly 49% in the last 12 months.
You can also take a peek at the 10 Technology Stocks to Sell Now According to Cathie Wood and Top 10 Stock Picks of Jason McDougall’s 11 Capital Partners.
