Oil stocks are a great investment, whether you’re just investing as a side hustle or you’re a seasoned investor. When you find the top oil stocks and invest in them, you can count on them to be reliable and generate profits on your initial investment through compound interest and dividends.
The first step to investing in oil and making big gains on your stocks is to figure out which oil stocks to buy. Not all of them are created equal, so you want to stick with the best performers of today.
Before diving into the top oil stocks, let’s take a look at what an oil stock actually is.
What Is an Oil Stock?
An oil stock describes the stock, or the share, of a company that participates in the exploration, production, and distribution of oil. When the price of crude oil rises and falls, some of these companies’ stocks rise and fall. Oftentimes, oil stocks are from companies that do more than just work in oil – they will work in the energy industry as a whole and have a number of different holdings. You can invest in individual oil stocks on the New York Stock Exchange and the Nasdaq, for instance, and buy these stocks through brokers like Ally and E*TRADE. You can find out how oil company stocks are doing by visiting Nasdaq.com and putting in the stock ticker symbols.
Why Invest in Oil Stocks?
The demand for crude oil keeps increasing. More than 100 million barrels per day were used in 2018. People and businesses need oil to power their vehicles, as well as to use in petrochemicals.
In 2018, the revenue for the top oil companies was huge. The no. 1 earner was Sinopec, a Chinese company that brought in $377.28 billion in revenue. Royal Dutch Shell saw profits of $322.67 billion, and Phillips 66 brought in $103.36 billion. Despite a drop in oil prices in 2018, the largest oil companies located Western countries raked in some of their highest annual profits they’d seen in years.
When you invest in the top oil stocks, you get to be part of that success, earning money on your investment as the demand for oil grows. Oil stocks usually pay out above-average dividend yields, because oil companies make huge profits. If you invest right, you can earn a second income just on dividends alone.
The Current Price of Oil and The Top Oil Stocks in 2019
Before investing, you need to stay on top of oil news, including the current price of oil. As of March 26, 2019, the current price of crude oil is $59.94 per barrel. If you go to MacroTrends.net, you can view the current, as well as the historical, price of oil. If you’re going to buy oil company stocks, you need to be aware of how the price of oil is doing.
Now that you’re ready to invest, here are the top oil stocks you should consider buying in 2019.
1. Royal Dutch Shell
Royal Dutch Shell, also simply known as Shell, is based in the Netherlands and explores, surveys, and distributes oil. It is a multifaceted company that deals in both upstream, which involves the exploration and distribution of gas and oil, and downstream, which involves refining crude oil into various products and distributing, trading, and selling it throughout the globe. In 2018, its profits were $322.67 billion, making it one of the top oil stocks to invest in. The company did well in 2018 because they completed a $30 billion divestment program and were disciplined with capital investment management. They also started up new profitable projects in the United States, the North Sea, and Australia. Currently, their stock is around $62 per share.
Another one of the top oil stocks is Enbridge, a Canadian oil company, and the largest midstream company in the North American region. It transports 28% of the crude oil that is expended in North America every year. Enbridge generates, transports, and distributes energy products throughout the North American region, and in 2016, it purchased Spectra Oil, adding to its value. Enbridge is also the largest transporter of crude oil in Canada.
In 2018, the Spectra and Enbridge merger completed, and in the same year, Enbridge brought about $7 billion worth of new projects into fruition. In December 2018, the company announced it had its 24th consecutive annual quarterly dividend increase, which increased dividend payouts by 10%. And that’s not all, in Q3 of 2018, Enbridge’s earnings climbed about 50% year-over-year, totaling $933 million. If you want to invest in Enbridge, it’s currently trading at around $36 per share.
3. Phillips 66
Third on the list of the top oil stocks is Phillips 66, an American multinational energy company that has its roots in Houston, Texas. It started out with ConocoPhillips until it became its own independent energy company that has midstream and downstream assets. Its revenue in 2018 was $103.36 billion, up from $102.4 billion in 2017.
In 2018, Phillips 66 focused on constructing the 900,000-BPD Gray Oak Pipeline, which will offer crude oil transportation from the Permian and Eagle Ford to locations in Corpus Christi and Freeport, including the Sweeny Refinery. At the Sweeny Hub, Phillips 66 is building two 150,000-BPD natural gas liquids (NGL) fractionators and associated pipeline infrastructure. If you want to invest in Phillips 66, their current share price is around $97.
4. Occidental Petroleum
Occidental Petroleum is another top oil stocks. This company is headquartered in Delaware and Houston, works in hydrocarbon exploration in the U.S., the Middle East, and Colombia, and focuses on petrochemical manufacturing in the U.S., Canada, and Chile. In 2018, its revenue was $17.82 billion. Shareholders made more than $3.6 billion last year. For the fourth quarter of 2018, the total average daily production volumes were 700,000 barrels of oil equivalent. In 2018, Occidental Petroleum and White Energy announced a project to study the feasibility of capturing CO2 for use in enhanced oil recovery operations, and the company ceased pursuing a contract extension for Idd El-Shargi North Dome Offshore Field in Qatar. If you want to invest in Occidental Petroleum, it’s currently trading at around $66.35 per share.
Learning More About the Top Oil Stocks through Energy Advantage Investor
If you want to learn more about oil company stocks and which oil stocks to buy, make sure you subscribe to Energy Advantage Investor. Once you’re part of the Energy Inner Circle, you will discover what stocks are upcoming and how you can profit on this huge industry. All you have to do is check your inbox and follow the advice from oil expert Dr. Kent Moors. If you’re ready to make some big money on the top oil stocks, subscribe to Energy Advantage Investor today.