3 Oil Stocks To Check Out In The Stock Market Today
With Russia making its military push into Ukraine, investors could be thinking about the best stocks to buy during war. Accordingly, crucial sectors such as oil and oil stocks could be worth looking out for in the stock market today. For the most part, this boils down to concerns over what the current invasion could do to global energy supply chains. Because of this, the value of oil, and by extension, the appeal of investing in oil firms could also rise. With all this in mind, it would not surprise me to see investors eyeing the top oil stocks.
In fact, oil prices are already surging following the latest Ukraine-Russia news. Earlier today, Brent crude topped the $105 a barrel price point after gaining 8.5%. To put things into perspective, this marks a first since August 2014. After Russian President Vladimir Putin announced the attack, both the U.S. and Europe revealed plans for massive sanctions on Russia. The likes of which could, in theory, encompass Russian banks alongside insurance that covers Russian oil and gas deliveries. Also, U.S. West Texas Intermediate crude soared by 8.5% as well to about $99.88 a barrel. Similar to Brent crude, this is its highest level since July 2014.
At the same time, oil companies such as Cheniere Energy (NYSE: LNG) and ExxonMobil (NYSE: XOM) are thriving as well. On one hand, Cheniere posted record revenue in its latest quarterly earnings call today. On the other hand, ExxonMobil reported its largest quarterly profit in seven years earlier this month. After considering all of this, the appeal for oil stocks in the stock market now is apparent. With that said, here are three making moves now.
Oil Stocks To Buy [Or Sell] This Week
- Chevron Corporation (NYSE: CVX)
- Diamondback Energy Inc. (NASDAQ: FANG)
- Marathon Oil Corporation (NYSE:MRO)
Starting us off today is the Chevron Corporation. As most would know, Chevron is among the leading players in the global energy industry today. Overall, the company focuses on producing crude oil and natural gas. These resources then act as crucial components in the manufacturing of a wide array of fuel sources. Among the key products, Chevron makes would be transportation fuels, lubricants, additives, and petrochemicals, to name a few. Through all of this, the company has and continues to grow its tech and operations globally. As it stands, Chevron currently has a market capitalization of over $260 billion.
Notably, geopolitical-related issues aside, Chevron remains hard at work growing and optimizing its operations. As of earlier this week, the company is creating a joint venture (JV) with Bunge Limited (NYSE: BG). Through the JV, the duo aims to create renewable feedstocks. This will see the integration of Bunge’s expertise in oilseed processing and Chevron’s experience in fuels manufacturing. In detail, Bunge will be contributing several of its soybean processing plants to the JV. Additionally, Chevron is investing $600 million in cash towards the venture. From these initial investments, the total manufacturing capacity adds up to a whopping 7,000 tons of feedstocks per day. By the end of 2024, the duo plan to double this impressive figure.
All in all, Bunge is a global-leading name in the food processing industry. With its over 200 years of experience in this field, we could be looking at a powerful team-up via this renewables-focused JV. Moreover, the current arrangement would help Chevron further bolster its clean energy portfolio. As such, would CVX stock be a top oil stock to buy in your books now?
Diamondback Energy Inc.
Diamondback is an independent oil and natural gas company that focuses on the acquisition, development, and exploration of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. On February 22, 2022, the company announced its fourth-quarter and full-year 2021 financial and operating results.
Diving in, total revenues for the quarter were $2.02 billion, compared to $769 million a year ago. A huge chunk of this revenue was from its oil, natural gas, and natural gas liquid sales. CEO Travis Stice had this to say, “Our operational achievements in the field in 2021 set a new bar for Diamondback. We will continue to build off of these operational efficiencies by controlling the variable portion of our operating and capital costs, which will help mitigate the inflationary pressures we are seeing across our business. As a result, we are confident we can maintain our best-in-class capital efficiency and cost structure through the cycle.”
The company also increased its annual dividend by 20% to $2.40 a share and returned a total capital of $515 million from stock purchases. For its full-year 2022 guidance, it expects oil production to be around 218-222 MBO/d. Assuming current strip commodity prices and the midpoint of Diamondback’s production and operating cost guidance, the company also expects to generate approximately $5.8 billion of net cash provided by operating activities in 2022. Given all of this, is FANG stock worth investing in right now?
Marathon Oil Corporation
Marathon Oil Corporation is an exploration and production company that focuses on four of its most competitive resource plays in the U.S. Namely, they include the Eagle Ford in Texas, the Bakken in North Dakota, Stack and Scoop in Oklahoma, and the Permian in New Mexico. It also boasts a world-class integrated gas business in Equatorial Guinea. Its portfolio is oil-weighted but well balanced with an approximate 50% oil and 50% gas/NGL production mix.
On February 16, 2022, the company reported its fourth-quarter financials. Firstly, it reported a net income of $649 million or $0.84 per diluted share. Impressively, it also returned over 70% of fourth-quarter cash flow from operations to equity holders and executed $1 billion of share repurchases since October 2021, reducing share count by 8%. This comes after accelerating its 2021 gross debt reduction objective of $1.4 billion into the third quarter.
Last month, the company had also declared a dividend of $0.07 per share for its common stock. The dividend will be made payable on March 10, 2022, to stockholders of record on February 16, 2022. This would be the fourth consecutive increase to its quarterly base dividend and has increased its base dividend by more than 130% in the past year. All things considered, is MRO stock a top oil stock to add to your portfolio?