Big Oil Delivers Big Earnings, Big Share Buybacks and Big Dividend Hikes

With about 70% of S&P 500 companies already in with earnings results for the fourth quarter, one sector is the hands-down winner for the quarter and 2022, and that is energy. While the benchmark pricing for both Brent and West Texas Intermediate crudes have backed up from the elevated $120 per barrel last summer, prices currently are rising. Plus, with Brent now at $84 and WTI at $77, all the major companies are making very solid money.

Investors in energy have fared much better than most over the past year, and it is a good bet that the positive strength for the sector remains. Despite the rhetoric from some about egregious profits, stock buybacks and dividend increases, the reality is energy is extremely cyclical. Exxon alone lost $22 billion in 2020 when the pandemic hit. Did the government reimburse them for the losses?

We screened our 24/7 Wall St. energy research database for the mega-cap majors that hit the proverbial ball out of the park for the fourth quarter. The following six stocks look like very tempting buys now, especially as the seasonal tailwind for energy is right around the corner. We focused on companies that are rated Buy, and it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.


This is one of the premier European integrated oil giants, and top Wall Street 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.

The company posted record 2022 earnings, along with the biggest profit in the 114-year history of the company. In addition, management announced a 10% increase in the dividend and an extra $2.75 billion of buybacks to an already big scheduled program.

Holders of BP stock will receive a 4.13% yield, with the coming increase. Piper Sandler’s $39 target price may be headed higher, and it compares with the $39.60 consensus target. Tuesday’s $37.75 closing share price was up over 8% on the day after the aforementioned outstanding results.

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