Exxon also posted stellar results for the second quarter. Its upstream segment net income came in above consensus estimates, rebounding sharply from the year-ago quarter’s pandemic-depressed lows. The upstream segment is involved in the exploration and development of oil and natural gas properties, as well as the extraction and production of crude oil and natural gas. It benefits from higher oil prices. Earnings and revenue continue to rebound as the global economy recovers from last year’s pandemic-induced shock.
The company pays investors a 6.04% dividend, which will continue to be defended. The huge $90 BofA Securities price target compares with a $66.34 consensus target. Exxon Mobil stock ended trading on Friday at $57.57 a share.
Royal Dutch Shell
This is a top international play for investors looking to add energy exposure and is yet another company that posted solid results. Royal Dutch Shell PLC (NYSE: RDS-A) operates as an independent oil and gas company worldwide through its Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas and natural gas liquids.
Shell also converts natural gas to liquids to provide fuels and other products; markets and trades crude oil and natural gas; transports oil; liquefies and transports gas; extracts bitumen from mined oil sands and converts it to synthetic crude oil; and generates electricity from wind energy.
In addition, the company engages in the conversion of crude oil into a range of refined products, including gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas for transport, lubricants, bitumen and sulphur; production and sale of petrochemicals for industrial customers; refining; trading and supply; pipelines and marketing; and alternative energy businesses.
Shell posted a net profit of $5.5 billion for the second quarter of the year on the back of stronger oil prices and said it will buy back $2 billion worth of shares. The company also booked free cash flow of $9.7 billion for the period, up from $200 million a year earlier, and reduced its net debt to $65.7 billion from $77.8 billion for the second quarter of 2020.
Holders of Royal Dutch Shell stock receive a 3.12% dividend. BofA Securities has set a $57 price objective. The consensus figure is $54.60, and shares closed on Friday at $40.62 apiece.
With air travel climbing and the busy summer driving season still in full swing, consumers can bet on continued higher prices at the pump. That noted, with dependable dividends and long histories of market dominance, these top stocks make good sense for growth and income investors looking to add energy but who are wary due to the big run-up in oil pricing over the past year.