On Friday, January 1, 2021, West Texas Intermediate crude was trading at $48.52 a barrel and Brent crude was trading at $51.82. Both are now hovering around the $80 mark, and the analysts at Goldman Sachs think the $90 level is all but a given, despite some of the factors that resulted in the selling recently. With oil currently at the highest levels in seven years, many investors and traders may be thinking it’s time to sell, but the reality is that many of the stocks in the industry, while certainly higher than in January, have room to run.
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Highlighting the recent pullback were numerous items, not the least of which is that more production is coming online. Given the speed that the economy has come back, and the reluctance of OPEC to ramp up their output, that means higher prices are almost a given. Plus, the backup in oil prices has some taking profits, and that is offering investors an outstanding entry point for some of the top companies in the industry.
We screened our 24/7 Wall St. energy research database looking for Buy-rated integrated oil stocks both domestic and foreign reach and with the highest dividends. We found five that look like outstanding and relatively safe ideas now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
BP
This is one of the premier European integrated oil giants, and Goldman Sachs is very positive on the shares. BP PLC (NYSE: BP) engages in the energy business worldwide. It produces and trades in natural gas; offers biofuels; operates onshore and offshore wind power and solar power generating facilities; and provides de-carbonization solutions and services, such as hydrogen and carbon capture, usage and storage.
The company is also involved in the convenience and mobility business, which manages the sale of fuels to wholesale and retail customers, convenience products, aviation fuels, and Castrol lubricants. It is involved in refining, supply and trading of oil products, as well as operation of electric vehicle charging facilities. In addition, it produces and refines oil and gas, and it invests in upstream, downstream and alternative energy companies, as well as in advanced mobility, bio and low carbon products, carbon management, digital transformation and power and storage areas.
Shareholders receive a 4.69% yield. The Goldman Sachs price target for the domestic shares is $45, which is higher than the $35.22 consensus target. The final BP stock trade for Monday was reported at $27.55.
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