While many market experts expect the hydrocarbons sector to skyrocket - and therefore sendoil stocksBuy more; in fact, the segment has shrunk significantly. However, according to recentCNBCArticle, Fossil Fuel Prices Plummetmay soon hit the bottomFurthermore, a more pronounced increase is likely to occur in the coming quarters. Let's face it: the hydrocarbons sector has disappointed speculators with a series of falls. However, things could finally be looking up for industry bulls. "It definitely looks like they've bottomed now, there are multiple indications," said Ed Morse, global head of commodities research at Citigroup. The optimism is credible.
If so, you may want to consider entering "black gold" before the bullish wave. Here are seven oil stocks you can buy based on their position in the energy value chain.
Oil Stocks to Buy: Shell (SHEL)
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A large British multinational oil and gas company,shell(NYSE:Shell) among super oil stocks. As an integrated hydrocarbons company, which means that it operates in all three parts of the industrial value chain, Shell offers a balanced exposure to those who expect the recovery of the entire sector. SHEL's share value has risen nearly 8% this year.
existfinance, the company has good (although not dramatic) statistics. For example, its three-year revenue growth rate of 9.2% outperforms industry peers by 53%. Even more impressive, its book growth rate reached 8.8% during the same period, which is higher than the 71.24% of its industry competitors.
Also, SHEL may be underrated. SHEL currently trades at 4.83 times free cash flow (Free cash flow). As a discount to the underlying metrics, Shell outperformed 65.53% of its peers. Finally, Wall Street analysts view SHEL asStrong purchase of KonsenzusOverall, his $71.74 average price target implies nearly 19% upside potential.
Oil stocks to buy: TotalEnergies (TTE)
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French multinational oil and energy integrated backbone network,Total energy(NYSE:TTE) is also among the supergiants. Currently, the company's market capitalization is just over $150 billion. TTE is down almost 2% so far this year. However, in the last 365 days, it has increased its share value by almost 13 percent. If hydrocarbon prices rise again, TTE could be one of the best oil stocks to buy.
In theory, speculators might like that TotalEnergies could be undervalued. Currently the market price of TET isForward multiple of 5.63.As discounted to expected earnings, the company ranks better than 65.93% of publicly traded oil and gas companies. In addition, the share is trading at 5.22 times FCF. This compares to an industry average stat of 6.67x. On the operational front, TotalEnergies got the job done with a three-year revenue growth rate of 16.8%, ahead of the competition at 67.3%. In addition, its EBITDA growth rate was 20.7% in the same period. Finally, hedge analysts view TTE asConsensus Moderate BuyHis $76 average price target implies more than 26% upside potential.
Oil Stocks to Buy: ConocoPhillips (COP)
Headquartered in Houston, Texas,ConocoPhillips(NYSE:police) also belongs to super oil stocks. However, the company is mainly focused on the exploration and production of hydrocarbons, also known as the upstream sector. ConocoPhillips currently has a market capitalization of more than $120 billion. Since the beginning of the year, COP's stake has lost more than 12% in value. Over the past year, it has fallen more than 3%.
However, those who seekdecent valueHis maps may have been found in his oil inventory. According to Gurufocus, COP has a P/E growth rate of 0.32. That compares to the industry median statistic of 0.74. Also, the enterprise value to FCF ratio is 6.87. By comparison, the industry median is 9.5 times higher. On the operating front, ConocoPhillips' three-year revenue growth rate of 28.4% outperformed its peers' growth rate of 83.26%. Additionally, its FCF growth rate of 52.9% over the same period was higher than the 83.46% of its industry peers. Finally, analysts see the COP asconsensus strong buyHis average price target is $135, implying nearly 36% upside potential.
Moving on to a core component -handling services like storage and transportation-onkyo(NYSE:power panel) provides a fundamentally sound investment in buying oil stocks. Enbridge is headquartered in Canada and has an extensive pipeline network in North America. At the time of writing, the company's market capitalization is $77.9 billion. Since opening in January, ENB is down about 2%. Over the past year, it has fallen more than 12%.
Financially, it has to be said that Enbridge is not the most confidence-inspiring oil stock. At first glance, it seems too expensive. Also, it doesn't beat the competition when it comes to sales. At the same time, Enbridge is having funstable profitability.As an important intermediate player, it is critical to the broader stability of North America's energy infrastructure. Returning to Wall Street, analysts see ENB asConsensus Moderate BuyOn average, his price target is $45.36, implying 18% upside potential.
Based in Tulsa, Oklahoma,Williams(NYSE:WMB) whose main activity is the processing and transportation of natural gas. according to your ownpublic information, which also owns oil and electricity production assets. Therefore, WMB belongs to the peripheral oil reserves. The underlying business currently has a market capitalization of just under $36 billion. WMB has lost 9% of its share value since it opened in January.
Like Enbridge above, Williams doesn't offer the most confidencefinanceInstead, the core of your investment proposition focuses on specific mid-market companies. However, he is not completely devoid of specific stats. For example, the company's three-year revenue growth rate of 9.9% exceeds other companies' revenue growth rate of 54.38%. In terms of profitability, its net profit margin last year was 22.53%, higher than its competition's rate of 74.9%.
Looking at Wall Street, analysts see WMB asConsensus Moderate BuyOverall, his $36.85 average price target implies nearly 26% upside potential.
Valero Energy (VLO)
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from San Antonio, Texas,Valero Energy(NYSE:VLO) focuses on the downstream components of the energy value chain. Basically, if you're putting a product on your car, you're dealing with middle-of-the-road businesses. In particular, Valero focuses on the production and sale of transportation fuels, other petrochemical products, and electricity. VLO has lost 8% of its share value since it opened in January.
According to Gurufocus, Valero could bemoderately underrated, which could attract speculators in oil shares to buy. VLO is currently trading at a forward multiple of 5.03. Taking into account the expected earnings, Valero ranks better than 72.24% of the companies in the hydrocarbons sector.
On the operating side, Valero's three-year revenue growth rate of 19.4% is higher than its peers' growth rate of 72.81%. During the same period, its FCF growth rate was 47.7%, compared to 80.88%. Finally, analysts see VLO asconsensus strong buyOn average, his price target is $158.27, implying upside potential of more than 43%.
HF Sinclair (DINO)
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diversified Energy Company,HF Sinclair(NYSE:dinosaur) manufactures and sells products such as gasoline, diesel, jet fuel, renewable diesel, and specialty lubricants. HF Sinclair could cynically benefit from a captive audience framework if higher energy prices hit the economy. It currently has a market capitalization of $7.7 billion. It is one of the riskiest oil stocks to buy, down more than 19% since it opened in January.
However, for those looking for a discount, DINO is attractive. DINO currently sells for an initial multiple of 4.83. Calculating expected earnings, HF Sinclair outperforms the industry by 73.82%. In addition, it trades at 0.22 times final sales. That compares to an industry median of 0.89 times. On the operational side, HF Sinclair's three-year revenue growth rate was 21.8%, outperforming its peers' growth rate of 76.29%. In addition, its book growth rate was 8.3% during the same period, higher than the 70% growth rate of its competitors.
Finally, analysts see DINO asConsensus Moderate BuyHis $60.55 average price target implies more than 51% upside potential.
On launch day, Josh EnomotoIt does not (directly or indirectly) have any position in the securities listed here.The opinions expressed in this article are those of the author and are administered by InvestorPlace.comPosting Guidelines.
Josh Enomoto was a Senior Business Analyst at Sony Electronics, where he helped close major deals with Fortune Global 500 companies. Over the past several years, he has provided unique and important insights into the investment market, as well as other industries, including legal , construction and health administration.