Top 5 Oil and Gas Stocks to Invest In

2. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Holders: 67

ConocoPhillips (NYSE:COP) is one of the largest hydrocarbon exploration companies in the United States. It operates in 15 countries and has proven reserves of 5 billion barrels of oil equivalent. Petroleum and natural gas make up 50% and 37% of these reserves respectively. 

ConocoPhillips (NYSE:COP) has an annual dividend yield of 3.16% as of June 28. The company has been consecutively growing its dividend payouts for five years. The energy giant has a dividend payout ratio of 19% as of Q1 2022 which reinforces the likelihood of sustained dividend growth.

On April 25, Raymond James analyst John Freeman raised his price target on ConocoPhillips (COP) to $160 from $120 and kept a Strong Buy rating on the shares. In his research note, the analyst observed that A-rated debt and diverse-asset base continue to place the company in a league of its own. He went on to add that full exposure to strip pricing should continue to drive free cash flow for ConocoPhillips. 

The company has a P/E ratio of 9.5, far lower than the industry average. ConocoPhillips boasts low risk to investors given its leverage that is only 36% of shareholder equity. The total number of hedge funds invested in the company as of the first quarter of 2022 are 67. They collectively hold $2.5 billion worth of shares in ConocoPhillips. 

ClearBridge Investments brought up ConocoPhillips’ stellar Q1 performance in their Q1 2022 investor letter. Here is what the letter said: 

“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holdings ConocoPhillips (NYSE:COP) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”