Shares of this mega-cap energy leader have been on fire but still have big upside potential. 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.
BofA Securities has a Buy rating on this integrated giant as well, and it said this after the company posted strong earnings for the quarter:
Earnings beat versus our estimate was entirely on chemicals with margins at a 10 year high. Solid quarter with debt down $4 billion quarter-over-quarter, cost initiatives on track and with the announced sale of UK non-core assets. Retain Buy as ExxonMobil has invested through the cycle which positions it to expand its future free cash flow to support dividends and stock buybacks.
The company pays investors a 5.78% dividend, which will continue to be defended. BofA Securities has a massive $90 price target, while the consensus target is $64.16. Exxon stock closed trading on Tuesday at $60.46 a share.
The top master limited partnership (MLP) is a very safe way for investors looking for energy exposure and income. Energy Transfer L.P. (NYSE: ET) owns and operates one of the largest and most diversified portfolios of energy assets in the United States, with a strategic footprint in all the major domestic production basins.
This publicly traded limited partnership has core operations that include complimentary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGLs) and refined product transportation and terminaling assets; NGL fractionation; and various acquisition and marketing assets.
Through its ownership of Energy Transfer Operating, formerly known as Energy Transfer Partners, the company also owns Lake Charles LNG, as well as the general partner interests, the incentive distribution rights and 28.5 million common units of Sunoco, and the general partner interests and 39.7 million common units of USA Compression Partners.
Investors receive a 5.95% distribution. Credit Suisse’s Outperform rating comes with a $13 price target. The posted consensus target for Energy Transfer stock is $12.76, and the shares closed at $10.26 on Tuesday.