Energy Business

Portfolio Managers Bullish on Oil for 2021: 4 Dividend Energy Stocks to Buy Now

Many Wall Street analysts feel that Conoco can accelerate growth from a reloaded portfolio depth in the Bakken and Eagle Ford, with visibility on future growth from a sizable position in the Permian.

Investors receive a healthy 4.03% dividend. The BofA Securities price target is $45, while the consensus target is $46.09. ConocoPhillips stock was last seen trading at $42.71, after a 7.7% gain on Monday.

Exxon Mobil

The energy giant is trading at levels that are higher than the March lows, but the short sellers have stood their ground. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

This was an outstanding short earlier in the year, especially when oil futures cratered to literally below zero, but one would think hedge funds are keeping a close eye on this position because if the economy opens up even some, the benchmark price could go back above the $50 level or higher.

The company offers a huge 8.84% dividend, which probably will continue to be defended. BofA Securities has a Buy rating with a $74 price target. The consensus target is much lower at $43.30. Exxon stock closed Monday at $39.36 per share.

Valero Energy

This Wall Street favorite is a very solid energy play for more conservative balanced accounts. Valero Energy Corp. (NYSE: VLO) is one of the largest independent petroleum refining and marketing companies in the United States. It is based in San Antonio, Texas; owns 13 refineries in the United States, Canada and Europe; and has a total throughput capacity of around 2.5 million barrels per day.

Valero also is a joint venture partner in Diamond Green Diesel, which operates a renewable diesel plant in Norco, Louisiana. Diamond Green Diesel is North America’s largest biomass-based diesel plant.

Valero sells its products in the wholesale rack or bulk markets in the United States, Canada, the United Kingdom, Ireland and Latin America. Approximately 7,400 outlets carry Valero’s brand names.

Investors receive an outstanding 6.99% dividend. The BofA Securities analysts are very bullish and have a $75 price target. The consensus target is lower at $58.56. Valero Energy stock ended Monday at $56.09 a share, after an incredible jump of over 10%.

While there is always an outside chance that any of these companies could still cut their dividends, it seems unlikely now that the worst for the sector and benchmark oil pricing seemingly has passed. We stick with three integrated giants and a large-cap refiner as they all have the ability to fight through cyclical drops in the sector and oil pricing, have multiple income streams and have already done a large amount of fiscal belt-tightening this year.