This integrated giant is a safer way for investors looking to add positions in the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company, with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.
The company sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas. Some Wall Street analysts estimate the company will have a compound annual growth rate of over 5% for the next five years.
The company posted solid first-quarter results and BofA Securities said this:
Chevron delivered an in line quarter with expectations with adjusted EPS of $0.90 including a $0.16 impact from winter storm Uri. It raised its dividend confirming the first call on free cash but a flat production trend raises questions on maintenance capital. We maintain our Buy on relative exposure to an oil recovery.
Investors are now paid $1.34 per share, which is a 4.99% dividend. BofA Securities has a $125 price target, and the consensus target is $119.97. The last Chevron stock trade for Wednesday was at $107.37 a share.
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This is one of the top picks across Wall Street in its sector and an outside way to play the electric vehicle trend. Freeport-McMoRan Inc. (NYSE: FCX) is the world’s largest publicly traded copper and moly producer, as well as the eighth largest gold producer. Its key operating and development assets are in Indonesia, North America, South America and Africa.
Highly leveraged toward copper mining, the company could be a big player in a scenario of rebuilding and repairing old and battered projects, and it clearly would benefit from stronger demand and higher prices for industrial commodities.
Trafigura’s Chief Economist Sadd Rahim recently told analysts that he remains bullish on the current commodity cycle and sees room for significant further upside potential to commodity prices over the next one to three years. In particular, this is due to accelerating demand growth, excluding China and supply constraints. He believes that this cycle is in the very early stages, as key demand drivers, such as pent-up consumer demand, accelerating global capital expenditures and massive stimulus in the United States, have yet to fully kick in.
Holders of Freeport-McMoRan stock receive just a 0.70% dividend. The $54 BofA Securities price target is well above the $40.03 consensus price target. Shares closed most recently at $42.75, after retreating almost 5% on Wednesday.