In this article, we will be looking at the 10 best oil stocks that pay dividends.
Ever since the reported economic recovery in the US, investors have begun to feel confident about the recovery of the global oil industry as well. However, some energy analysts like Vandana Hari, founder of Vanda Insights, have voiced their opinions and called investor approaches to the oil industry and oil stocks a bit too “optimistic.” Hari has commented that oil prices may not, in fact, rise to $80 a barrel this year or $100 a barrel in 2022, unlike some more bullish investors, according to CNBC. Rather, she believes that Brent prices may actually stick to the $70-$75 range, closer to their prices as of this June. Further, despite the fact that international benchmark Brent has gained over 45% since the start of 2021, Hari is still skeptical of the oil industry, stating that there remains a downside risk to oil prices.
Despite this, investors vying for oil stocks need not worry too much. According to the International Energy Agency’s (IEA) Oil Market Report for June 2021, the global demand for oil is expected to be as high as it was before the COVID-19 pandemic hit, rising by about 5.4 mb/d this year and then by 3.1 mb/d in 2021. Additionally, the global oil supply is also foreseen to grow faster in 2022. Finally, the IEA has also estimated that OECD industry stocks were steady this April, while preliminary data for May revealed that industry stocks in the US, Europe, and Japan rose by about 17.2 mb. With this outlook, alongside the fact that even traditional energy and oil companies are becoming more prone to integrate green energy tactics in their operations, it can be claimed that oil stocks like Exxon Mobil Corporation (NYSE: XOM), Chevron Corporation (NYSE: CVX), Royal Dutch Shell plc (NYSE: RDS-B), and BP p.l.c. (NYSE: BP) can be expected to fare well in the period of economic growth and recovery.
Just like the global oil industry, the entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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We can now take a look at the 10 best oil stocks that pay dividends. To compile this list, we selected stocks based on their strong fundamentals and positive ratings from analysts. We have also picked stocks with a dividend yield of at least 3% while taking into account hedge fund sentiment to discern their popularity among hedge funds and investors. The stocks have been ranked from the lowest to the highest dividend yield.
Best Oil Stocks That Pay Dividends
10. Helmerich & Payne, Inc. (NYSE: HP)
Number of Hedge Fund Holders: 21
Dividend Yield: 3.4%
Helmerich & Payne, Inc. (NYSE: HP) is an energy company operating in the oil and gas drilling sector. The company provides drilling services and solutions for exploration and production companies and ranks 10th on our list of the best oil stocks that pay dividends.
Chase Mulvehill, a BofA analyst, upgraded Helmerich & Payne, Inc. (NYSE: HP) to Neutral from Underperform just this July, while Citigroup’s Scott Gruber also upgraded the company’s shares from Sell to Neutral in the same month. Gruber also raised his price target on Helmerich & Payne, Inc. (NYSE: HP) from $24 to $33.
In the fiscal second quarter of 2021, Helmerich & Payne, Inc. (NYSE: HP) had an EPS of -$0.60, beating estimates by $0.03. The company’s revenue was $296.17 million and also beating estimates by $5.56 million. Helmerich & Payne, Inc. (NYSE: HP) has gained about % in the past 6 months and % year to date as well.
By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Helmerich & Payne, Inc. (NYSE: HP) worth roughly $152 million. This is compared to 19 hedge funds in the previous quarter with stakes worth approximately $194 million.
Like Exxon Mobil Corporation (NYSE: XOM), Chevron Corporation (NYSE: CVX), Royal Dutch Shell plc (NYSE: RDS-B), and BP p.l.c. (NYSE: BP), Helmerich & Payne, Inc. (NYSE: HP) is a good oil stock to buy now.
9. Royal Dutch Shell plc (NYSE: RDS-B)
Number of Hedge Fund Holders: 36
Dividend Yield: 3.6%
Royal Dutch Shell plc (NYSE: RDS-B) is an energy and petrochemical company that extracts crude oil, natural gas, and natural gas liquids to transport and sell. It ranks 9th on our list of the best oil stocks that pay dividends.
This July, JPMorgan reiterated its Overweight rating on Royal Dutch Shell plc (NYSE: RDS-B) shares, while Barclays this April also reiterated its Equal Weight rating on the stock.
In the first quarter of 2021, Royal Dutch Shell plc (NYSE: RDS-B) had an EPS of $1,44, beating estimates by $0.53. The company’s revenue was $55.66 billion, significantly higher than its $43.99 billion revenue in the previous quarter. Royal Dutch Shell plc (NYSE: RDS-B) has gained about 1.98% in the past 6 months and 7.96% year to date as well.
By the end of the first quarter of 2021, 36 hedge funds out of the 866 tracked by Insider Monkey held stakes in Royal Dutch Shell plc (NYSE: RDS-B) worth roughly $2.19 billion. This is compared to 34 hedge funds in the previous quarter with stakes worth approximately $1.66 billion.
8. Canadian Natural Resources Limited (NYSE: CNQ)
Number of Hedge Fund Holders: 29
Dividend Yield: 4.57%
Canadian Natural Resources Limited (NYSE: CNQ) is an energy company headquartered in Calgary, Canada, and acquires, develops, and markets crude oil, natural gas, and natural gas liquids for sale. It also provides synthetic crude oil, light and medium crude oil, bitumen, and other forms of crude oil to consumers, and ranks 8th on our list of the best oil stocks that pay dividends.
Just this July, Raymond James’ George Huang retook coverage of Canadian Natural Resources Limited (NYSE: CNQ) shares with an Outperform rating alongside a $43.76 price target. Huang added that Canadian Natural Resources Limited (NYSE: CNQ) is expected to bring in about $10 billion in sustaining free cash flow in 2022.
In the first quarter of 2021, Canadian Natural Resources Limited (NYSE: CNQ) had an EPS of $0.85, beating estimates by $0.15. The company’s revenue was $5.43 billion, up 69.01% year over year and also beating estimates by $699.78 million. Canadian Natural Resources Limited (NYSE: CNQ) has gained about 31.69% in the past 6 months and year to date as well.
By the end of the first quarter of 2021, 29 hedge funds out of the 866 tracked by Insider Monkey held stakes in Canadian Natural Resources Limited (NYSE: CNQ) worth roughly $528 million. This is compared to 29 hedge funds in the previous quarter with stakes worth approximately $341 million.
Like Exxon Mobil Corporation (NYSE: XOM), Chevron Corporation (NYSE: CVX), Royal Dutch Shell plc (NYSE: RDS-B), and BP p.l.c. (NYSE: BP), Canadian Natural Resources Limited (NYSE: CNQ) is a good oil stock to buy now.
7. BP p.l.c. (NYSE: BP)
Number of Hedge Fund Holders: 29
Dividend Yield: 5.25%
BP p.l.c. (NYSE: BP), operating through its Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft segments, functions in the global energy business. The company ranks 7th on our list of the best oil stocks that pay dividends.
Piper Sandler has raised its price target on BP p.l.c. (NYSE: BP) shares from $32 to $37 as of this July. Additionally, JPMorgan’s Christyan Malek also reiterated his Overweight rating on BP p.l.c. (NYSE: BP) in the same month.
In the first quarter of 2021, BP p.l.c. (NYSE: BP) had an EPS of $0.78, beating estimates by $0.35. The company’s revenue was $34.54 billion, but missing estimates by $29.73 billion. BP p.l.c. (NYSE: BP) has gained about 2.43% in the past 6 months and 13.44% year to date as well.
By the end of the first quarter of 2021, 29 hedge funds out of the 866 tracked by Insider Monkey held stakes in BP p.l.c. (NYSE: BP) worth roughly $1.24 billion. This is compared to 29 hedge funds in the previous quarter with stakes worth approximately $927 million.
Like Exxon Mobil Corporation (NYSE: XOM), Chevron Corporation (NYSE: CVX), and Royal Dutch Shell plc (NYSE: RDS-B), BP p.l.c. (NYSE: BP) is a good oil stock to buy now.
6. Chevron Corporation (NYSE: CVX)
Number of Hedge Fund Holders: 41
Dividend Yield: 5.42%
Chevron Corporation (NYSE: CVX) has two segments, Upstream and Downstream, through which the company works to explore, develop, and produce crude oil and natural gas, and later refine it into petroleum products to be marketed. It ranks 6th on our list of the best oil stocks that pay dividends.
Ryan Todd, an analyst at Piper Sandler, has raised his price target on Chevron Corporation (NYSE: CVX) shares this July from $126 to $137. Todd also held on to his Overweight rating on the stock and commented that Q2 results for the oil sector can be expected to be “unquestionably positive.”
In the first quarter of 2021, Chevron Corporation (NYSE: CVX) had an EPS of $0.90, beating the previous quarter’s EPS of -$0.01 by a large margin. The company’s revenue was $32.03 billion, up 1.68% year over year and also surpassing the previous quarter’s $25.25 billion. Chevron Corporation (NYSE: CVX) has gained about 8.71% in the past 6 months and 16.66% year to date as well.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Chevron Corporation (NYSE: CVX) worth roughly $4.86 billion. This is compared to 50 hedge funds in the previous quarter with stakes worth approximately $5.39 billion.
ClearBridge Investments, an investment management firm, mentioned Chevron Corporation (NYSE: CVX) in its first-quarter 2021 investor letter. Here’s what they said:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names, (including) Chevron. We are positive on the company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
5. Exxon Mobil Corporation (NYSE: XOM)
Number of Hedge Fund Holders: 65
Dividend Yield: 6.09%
Exxon Mobil Corporation (NYSE: XOM), is an energy company with approximately 22,239 net operated wells with proved reserves, as of December 2020. It ranks 5th on our list of the best oil stocks that pay dividends.
Piper Sandler’s Ryan Todd has raised the firm’s price target on Exxon Mobil Corporation (NYSE: XOM) this July from $63 to $69. The firm has also retained a Neutral rating on the stock.
In the first quarter of 2021, Exxon Mobil Corporation (NYSE: XOM) had an EPS of $0.65, beating estimates by $0.05. The company’s revenue was $59.15 billion, up 5.32% year over year and also beating estimates by $2.89 billion. Exxon Mobil Corporation (NYSE: XOM) has gained about 21.77% in the past 6 months and 37.61% year to date as well.
By the end of the first quarter of 2021, 65 hedge funds out of the 866 tracked by Insider Monkey held stakes in Exxon Mobil Corporation (NYSE: XOM) worth roughly $2.77 billion. This is compared 63 to hedge funds in the previous quarter with stakes worth approximately $2.20 billion.
4. Valero Energy Corporation (NYSE: VLO)
Number of Hedge Fund Holders: 41
Dividend Yield: 6.18%
Valero Energy Corporation (NYSE: VLO) is a manufacturer of transportation fuels and petrochemical products. The company operates through its Refining, Renewable Diesel, and Ethanol segments, and ranks 4th on our list of the best oil stocks that pay dividends.
Theresa Chen, an analyst at Barclays, recently raised her price target on Valero Energy Corporation (NYSE: VLO) this June. The firm’s new price target on the shares is $94, up from the previous $84 price target, and Chen has also held onto her Overweight rating on Valero Energy Corporation (NYSE: VLO) shares.
In the first quarter of 2021, Valero Energy Corporation (NYSE: VLO) had an EPS of -$1.73, beating estimates by $0.12. The company’s revenue was $20.81 billion, also beating estimates by $1.37 billion. Valero Energy Corporation (NYSE: VLO) has gained about 6.85% in the past 6 months and 13.91% year to date as well.
By the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in Valero Energy Corporation (NYSE: VLO) worth roughly $462 million. This is compared to 38 hedge funds in the previous quarter with stakes worth approximately $409 million.
3. ONEOK, Inc. (NYSE: OKE)
Number of Hedge Fund Holders: 20
Dividend Yield: 7.04%
ONEOK, Inc. (NYSE: OKE) gathers, processes, stores, and transports natural gas in the US. The company also serves crude oil and natural gas production companies and ranks 3rd on our list of the best oil stocks that pay dividends.
Timm Schneider, a Citigroup analyst, raised his price target on ONEOK, Inc. (NYSE: OKE) shares this June. The new price target is $57, raised from the previous price target of $49, with Schneider holding on to the firm’s Neutral rating on ONEOK, Inc. (NYSE: OKE) stocks.
In the first quarter of 2021, ONEOK, Inc. (NYSE: OKE) had an EPS of $0.86, beating estimates by $0.08. The company’s revenue was $3.19 billion, up 49.53% year over year and also beating estimates by $418.70 million. ONEOK, Inc. (NYSE: OKE) has gained about 25.72% in the past 6 months and 41.57% year to date as well.
By the end of the first quarter of 2021, 20 hedge funds out of the 866 tracked by Insider Monkey held stakes in ONEOK, Inc. (NYSE: OKE) worth roughly $67.3 million. This is compared to 22 hedge funds in the previous quarter with stakes worth approximately $105 million.
2. TotalEnergies SE (NYSE: TTE)
Number of Hedge Fund Holders: 17
Dividend Yield: 7.24%
TotalEnergies SE (NYSE: TTE) is an oil and gas company operating across the globe through its Exploration & Production, Integrated Gas, Renewables & Power, Refining & Chemicals, and Marketing & Services segments. The company ranks 2nd on our list of the best oil stocks that pay dividends.
Piper Sandler has raised its price target on TotalEnergies SE (NYSE: TTE) just this July from $60 to $66.
In the first quarter of 2021, TotalEnergies SE (NYSE: TTE) had an EPS of $1.10, beating estimates by $0.24. The company’s revenue was $38.63 billion, up 0.15% year over year and significantly higher than the previous quarter’s $32.35 billion revenue. TotalEnergies SE (NYSE: TTE) has gained about 1.61% in the past 6 months and 3.85% year to date as well.
By the end of the first quarter of 2021, 17 hedge funds out of the 866 tracked by Insider Monkey held stakes in TotalEnergies SE (NYSE: TTE) worth roughly $1.16 billion. This is compared to 14 hedge funds in the previous quarter with stakes worth approximately $980 million.
1. Enterprise Products Partners L.P. (NYSE: EPD)
Number of Hedge Fund Holders: 26
Dividend Yield: 7.65%
Enterprise Products Partners L.P. (NYSE: EPD) is a provider of midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, petrochemicals, and refined products. The company ranks 1st on our list of the best oil stocks that pay dividends.
TD Securities has a Buy rating on Enterprise Products Partners L.P. (NYSE: EPD) shares, led by analyst Linda Ezergailis. Ezergailis also set a $28 price target on Enterprise Products Partners L.P. (NYSE: EPD).
In the first quarter of 2021, Enterprise Products Partners L.P. (NYSE: EPD) had an EPS of $0.64, beating estimates by $0.17. The company’s revenue was $9.16 billion, up 22.36% year over year and also beating estimates by $2.08 billion. Enterprise Products Partners L.P. (NYSE: EPD) has gained about 11.36% in the past 6 months and 21.93% year to date as well.
By the end of the first quarter of 2021, 26 hedge funds out of the 866 tracked by Insider Monkey held stakes in Enterprise Products Partners L.P. (NYSE: EPD) worth roughly $299 million. This is compared to 30 hedge funds in the previous quarter with stakes worth approximately $316 million.
ClearBridge Investments, an investment management firm, mentioned Enterprise Products Partners L.P. (NYSE: EPD) in its first-quarter 2021 investor letter. Here’s what they said:
“While reducing in health care and consumer staples, we increased our exposure to high-quality names in economically sensitive areas of the market. We added to low-cost, high-quality energy names (including) Enterprise Products Partners LP. We are positive on this company’s strong balance sheets, competitive positions and exposure to an economic recovery.”
You can also take a peek at 10 Best Oil Stocks to Buy Amid Post-COVID Demand Boom and Price Volatility and 10 Best Oil Stocks To Buy Now.
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Disclosure: None. 10 Best Oil Stocks that Pay Dividends is originally published on Insider Monkey.
