I recommend that an oil and gas stock play a part in any well-diversified portfolio. There are many companies to choose from and they cover a wide range of risk. The companies also cover a wide range of stock types, from low-risk income stocks to higher-risk growth stocks. In this article, I will examine five oil and gas stocks and supply some insight into where the stocks fit into a well-balanced portfolio:
ConocoPhillips (COP, Financial): ConocoPhillips has been range bound over the past year between $60 and $80 per share and for the past four months has been fluctuating right in the middle of that range. The company pays out a dividend of $2.64 per share that brings about a dividend yield of 3.6% at the stock's current price. This dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 29% which is in line with the industry average of 31% and higher than the company's nearest competitor BP (BP, Financial)'s payout ratio of 21%.
ConocoPhillips is based in Houston, Texas, was established in 1917 and today has operations in more than 30 countries. In my opinion, the company's sheer size and its willingness to invest in technologies that it would otherwise compete with will carry the company well into the 21st century. The company is the third largest of its kind in the world and operates in all sectors of the oil and natural gas industry from exploration, production and midstream operations to refining and marketing. In addition to their conventional business activities the company's non-conventional interests are in alternative energy, biofuels, refining and hydrocarbon recovery.
Exxon Mobil Corporation (XOM, Financial): Exxon Mobil Corporation is presently coming out of a trough it has been in since October of 2011 and is flirting with its 52-week high $88.23 per share. In addition to this capital appreciation the company also pays out a dividend of $1.88 per share that amounts to a dividend yield of 2.2% at the stock's current price. This dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 22% which is lower than the industry average of 31% and slightly lower than the company's nearest competitor Chevron Corporation (CVX, Financial)'s payout ratio of 23%.
Exxon Mobil Corporation is headquartered in Irving, Texas, were it was incorporated in 1870. In addition to its U.S. operations the company has operations in South America, Canada, Europe, Australia, Asia and Africa. The company engages in the exploration, production, transportation and sale of crude oil and natural gas, and also manufactures petroleum products.
I think with the opening of Iraq oil supplies the company stands to benefit from the increased production capacity. The power brokers, both government and nongovernment, are making their plays for a piece of the pie but this is really nothing new. As the revenue starts coming in and the country's economy is reborn, tensions should ease — at least in Iraq itself. (Iran is a whole new ball game.)
Chevron Corporation: Chevron Corporation has been range bound over the past year between $90 and $110 per share and for the past two months has been in the upper quartile of that range. In addition to this capital appreciation the company also pays out a dividend of $3.24 per share that translates into a dividend yield of 3% at the stock's current price. The dividend is both paid out and raised on a consistent basis. Chevron Corporation has a payout ratio of 23%, which is lower than the industry average of 31% and slightly higher than the company's nearest competitor BP's payout ratio of 21%.
Established in 1879 and based in San Ramon, Calif., Chevron Corporation today is one of the six major oil companies in the world and the second largest energy company in the U.S. The company has operations in over 180 countries and across the entire supply chain, beginning with exploration and production to the refining, marketing and transportation of their petroleum products. Chevron Corporation is also engaged in the mining of coal and other minerals, the generation of electricity and the production of chemicals.
The company's plans to sell off their less productive assets and focus on developing more productive assets, which include alternative energy solutions, set the them up well for the short term and the long term.
Devon Energy Corporation (DVN, Financial): Devon Energy Corporation is just starting to break out of the lower quartile of a range ($50 to $100 per share) it's been in for a year. The stock closed today at $75.02 with almost three times its average volume. In my opinion, with the new-found positive sentiment in general and the momentum of this particular stock you could see new 52-week highs in the short term.
In addition to this capital appreciation the company also pays out a dividend of $0.68 per share that amounts to a dividend yield of 1% at the stock's current price. Although small when compared to most of its competitors this dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 6% which is much lower than the industry average of 31% and lower than the company's nearest competitor Chesapeake Energy Corp (CHK, Financial)'s payout ratio of 17%.
Devon Energy Corporation is based in Oklahoma City, Okla., and was established there in 1971. Operating in the U.S. and Canada it is involved in the exploration for and development of natural gas and oil. The company also engages in the processing of these commodities and acquires smaller operators engaged in similar activities.
Royal Dutch Shell Plc (RDS.A): Royal Dutch Shell has been range bound over the past year between $60 and $80 per share and for the past four months has been fluctuating right in the middle of that range. Royal Dutch Shell pays out a dividend of $3.36 per share that brings in a dividend yield of 4.6% at the stock's current price. This dividend is paid out on a consistent basis but has not been raised since 2009. The payout ratio on the stock is 34% which is slightly higher than the industry average of 31% and significantly higher than the company's nearest competitor BP 's payout ratio of 21%.
Royal Dutch Shell is based in Hague, Netherlands and was incorporated in 2002. The company is engaged in several facets of the oil and gas industry worldwide. Royal Dutch Shell also manufactures and sells petrochemicals to industrial customers that produce plastics, coatings and detergents. With the downturn in the European economy and the sanctions against Iran, I believe Royal Dutch Shell may find itself between a rock and a hard place, so to speak, in the near future, paying more in input costs and selling less of the products it supplies.
ConocoPhillips (COP, Financial): ConocoPhillips has been range bound over the past year between $60 and $80 per share and for the past four months has been fluctuating right in the middle of that range. The company pays out a dividend of $2.64 per share that brings about a dividend yield of 3.6% at the stock's current price. This dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 29% which is in line with the industry average of 31% and higher than the company's nearest competitor BP (BP, Financial)'s payout ratio of 21%.
ConocoPhillips is based in Houston, Texas, was established in 1917 and today has operations in more than 30 countries. In my opinion, the company's sheer size and its willingness to invest in technologies that it would otherwise compete with will carry the company well into the 21st century. The company is the third largest of its kind in the world and operates in all sectors of the oil and natural gas industry from exploration, production and midstream operations to refining and marketing. In addition to their conventional business activities the company's non-conventional interests are in alternative energy, biofuels, refining and hydrocarbon recovery.
Exxon Mobil Corporation (XOM, Financial): Exxon Mobil Corporation is presently coming out of a trough it has been in since October of 2011 and is flirting with its 52-week high $88.23 per share. In addition to this capital appreciation the company also pays out a dividend of $1.88 per share that amounts to a dividend yield of 2.2% at the stock's current price. This dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 22% which is lower than the industry average of 31% and slightly lower than the company's nearest competitor Chevron Corporation (CVX, Financial)'s payout ratio of 23%.
Exxon Mobil Corporation is headquartered in Irving, Texas, were it was incorporated in 1870. In addition to its U.S. operations the company has operations in South America, Canada, Europe, Australia, Asia and Africa. The company engages in the exploration, production, transportation and sale of crude oil and natural gas, and also manufactures petroleum products.
I think with the opening of Iraq oil supplies the company stands to benefit from the increased production capacity. The power brokers, both government and nongovernment, are making their plays for a piece of the pie but this is really nothing new. As the revenue starts coming in and the country's economy is reborn, tensions should ease — at least in Iraq itself. (Iran is a whole new ball game.)
Chevron Corporation: Chevron Corporation has been range bound over the past year between $90 and $110 per share and for the past two months has been in the upper quartile of that range. In addition to this capital appreciation the company also pays out a dividend of $3.24 per share that translates into a dividend yield of 3% at the stock's current price. The dividend is both paid out and raised on a consistent basis. Chevron Corporation has a payout ratio of 23%, which is lower than the industry average of 31% and slightly higher than the company's nearest competitor BP's payout ratio of 21%.
Established in 1879 and based in San Ramon, Calif., Chevron Corporation today is one of the six major oil companies in the world and the second largest energy company in the U.S. The company has operations in over 180 countries and across the entire supply chain, beginning with exploration and production to the refining, marketing and transportation of their petroleum products. Chevron Corporation is also engaged in the mining of coal and other minerals, the generation of electricity and the production of chemicals.
The company's plans to sell off their less productive assets and focus on developing more productive assets, which include alternative energy solutions, set the them up well for the short term and the long term.
Devon Energy Corporation (DVN, Financial): Devon Energy Corporation is just starting to break out of the lower quartile of a range ($50 to $100 per share) it's been in for a year. The stock closed today at $75.02 with almost three times its average volume. In my opinion, with the new-found positive sentiment in general and the momentum of this particular stock you could see new 52-week highs in the short term.
In addition to this capital appreciation the company also pays out a dividend of $0.68 per share that amounts to a dividend yield of 1% at the stock's current price. Although small when compared to most of its competitors this dividend is both paid out and raised on a consistent basis. The payout ratio on the stock is 6% which is much lower than the industry average of 31% and lower than the company's nearest competitor Chesapeake Energy Corp (CHK, Financial)'s payout ratio of 17%.
Devon Energy Corporation is based in Oklahoma City, Okla., and was established there in 1971. Operating in the U.S. and Canada it is involved in the exploration for and development of natural gas and oil. The company also engages in the processing of these commodities and acquires smaller operators engaged in similar activities.
Royal Dutch Shell Plc (RDS.A): Royal Dutch Shell has been range bound over the past year between $60 and $80 per share and for the past four months has been fluctuating right in the middle of that range. Royal Dutch Shell pays out a dividend of $3.36 per share that brings in a dividend yield of 4.6% at the stock's current price. This dividend is paid out on a consistent basis but has not been raised since 2009. The payout ratio on the stock is 34% which is slightly higher than the industry average of 31% and significantly higher than the company's nearest competitor BP 's payout ratio of 21%.
Royal Dutch Shell is based in Hague, Netherlands and was incorporated in 2002. The company is engaged in several facets of the oil and gas industry worldwide. Royal Dutch Shell also manufactures and sells petrochemicals to industrial customers that produce plastics, coatings and detergents. With the downturn in the European economy and the sanctions against Iran, I believe Royal Dutch Shell may find itself between a rock and a hard place, so to speak, in the near future, paying more in input costs and selling less of the products it supplies.
