3 energy stocks with huge potential as crude oil prices goes parabolic
- Crude oil price has jumped to the highest level in almost a decade.
- Oil and gas companies will likely benefit as demand and prices rise.
- Chevron, Devon, and Pioneer are top stock picks.
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Crude oil and natural gas prices have rallied sharply in the past few months. On Tuesday, Brent soared to more than $105 for the first time in over 7 years. As a result, the Vanguard Energy ETF has soared to the highest level since October 2018. It has risen by over 200% from its lowest point in 2020. Here are some oil stocks to buy as prices jump.
Chevron (NYSE: CVX) is one of the biggest oil and gas companies in the world. The company generated more than $155 billion in 2021 up from $94 billion in the previous year. It is also highly profitable as it made a net income of $15 billion. This explains why the Chevron stock price has soared to an all-time high while its market cap has risen to $273 billion.
The company has minimal exposure to Russia and it recently announced a plan to hike its annual share buyback to $10 billion annually. It also rewards shareholders richly through dividends. It has a dividend yield of about 4%, which is higher than the S&P 500 average.
Devon Energy (NYSE: DVN) is a giant shale company with operations in Delaware, Eagle Ford, Anadarko, and Powder River basin. As a shale producer, the company is benefiting from the rising crude oil price. It has also benefited because of its lack of exposure to the Russian market. Indeed, the Devon Energy stock price is sitting at its all-time high.
The company had a strong 2021 and 2022 could be better. Its operating cash flow tripled while its free cash flow rose to an all-time high. Its total revenue for the year rose to more than $14 billion from the previous $4.5 billion. It moved from a $2.6 billion loss in 2020 to a $2.8 billion profit in 2021.
Pioneer Natural Resources
Pioneer Natural Resources (NYSE: PXD) is another shale company set to benefit as crude oil prices soar. Like Devon, it has little exposure to the Russian and international market, with most of its oil being consumed in the US.
Pioneer saw its revenue soar from $7 billion in 2020 to over $17 billion in 2021. It also emerged from a $200 million loss in 2020 to a $2.1 billion profit in 2022. The PXD stock price has also jumped to a record high and the trend will likely continue.
Other oil and gas stocks that will benefit are EOG Resources, Royal Dutch Shell, and Hess Corporation.