In what was a very surprising move as Americans celebrated the Labor Day holiday, the Organization of the Petroleum Exporting Countries (OPEC) cut oil production by 100,000 barrels a day, despite some stiff resistance from Russia. The energy ministers of the member nations agreed to return production levels to the original August quotas, saying that the increase last month was only for September. Though the U.S. stocks markets were closed Monday, the oil markets were not, and both Brent and West Texas Intermediate crude closed 3% higher.
Despite the Monday gains and Tuesday’s mixed close, Brent still trades well under the $100 level, while West Texas Intermediate was below $90 a barrel. That is a far cry from the $130 intraday highs hit back in March. What makes sense for investors now is to grab the big-divided energy giants that are on sale. They all are trading well below their 52-week highs hit earlier this year.
We screened our 24/7 Wall St. energy research database looking for large-cap energy leaders that paid substantial and dependable dividends and that are Buy rated at top Wall Street firms. Seven stocks made the grade. However, it is important to remember that no single analyst report should be used as the sole basis for any buying or selling decision.
This is one of the premier European integrated oil giants, and Goldman Sachs analysts are quite 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 4.36% yield. The Goldman Sachs price target for the domestic shares of BP stock is $45. That compares with a $37.14 consensus target and Tuesday’s closing share price of $31.13.
This integrated giant is a safer way for investors looking to get positioned in the energy sector. Chevron Corp. (NYSE: CVX) engages in integrated energy and chemicals operations worldwide.
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