No one knows when the oil crash will officially turn around, but there’s hints it might be over with the rally in oils stocks lately. Oil is up almost 50 percent from it’s January lows, and energy investors are sounding off about which stocks they’ll want their money when the rise of oil is certain.
According to 24/7 Wall St., blue chips are analysts focal point for oil stocks, with Chevron being the first one to watch. Chevron Corp. (NYSE: CVX) has a nice 3.95 percent dividend, and although today Chevron is trading around $106, the Cowen Group projects that stock will rise to $125 per share. Some analysts are projecting Chevron will have a five percent annual increase over the next five years. Chevron is a solid company with a solid place in the oil sector, and specifically natural gas and liquefied natural gas.
Exxon Mobile (NYSE: XOM) is also one oil stock about which analysts are bullish. The oil giant recently posted better-than-expected earnings for the first quarter. The Cowen Group reports that despite the dip in oil prices over the past year, Exxon Mobile’s projects have remained on track, and they expect efforts will rise in the last part of 2015. Exxon Mobile investors receive a 3.35 percent dividend, and the stock is currently trading around the $86 mark.
Sand fracker Emerge Energy Services (NYSE: EMES) is on oil stock analysts’ radar because of this company’s strong projected growth within the industry. Sand fracking is undoubtedly one way oil drilling companies will save on the bottom line, since it’s one of the cheapest methods for oil producers to amp up production and thus increase profits, according to The Motley Fool.
Emerge Energy Services is also undervalued, since the stock took a 30 percent beating when the company announced it would cut distribution by 29 percent in the first quarter of this year. The company also issued a much lower 2015 distribution guidance than expected. However, according to analysts, it’s possible the outlook is more positive than the guidance indicates. Although the payout will be volatile, if you’re willing to wait, the end game in this stock will be lucrative, with an 8.2 percent payout.
The final oil stock to watch is EOG Resources (NYSE: EOG). As the fastest-growing horizontal oil producer in the industry, it’s production has been growing by 30 percent each year until the crash in oil prices. For now, the company has been drilling wells, but not producing from them, preferring to poise itself to increase production when oil prices surge to $65 per barrel. Undoubtedly, this is a smart move, and one that will guarantee a surge in profits for this organization.
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