As the bull market sails past its first decade, value-minded investors worry that there are few bargains left. But there are, if you're willing to wade into the oil patch. The big problem is finding the courage. Even some of the best energy stocks have suffered recent returns reminiscent of the Deepwater Horizon. Oil-focused stocks naturally are subject to the price of oil, which depends, in part, on Middle East politics, the global economy and U. Oil prices as well as natural gas and other energy sources also depend on supply, and oil has been plentiful, thanks to the revolution in fracking.
This is particularly bad for energy stocks that explore and drill for oil, known as upstream companies. For companies that refine oil into gasoline and other products, however, lower prices can be good, since oil is a cost to them, rather than a product. Will the energy sector find relief in ?
So far, the experts aren't hopeful. The International Agency Energy says that oil supplies could be rich once again thanks to a pickup in production and tepid growth in demand. That bodes poorly for prices. If you're still willing to brave a potentially difficult sector, however, here are 10 of the best energy stocks to buy for The problem?
That helps explain most of the stock's tumble. Indeed, COG is a pure play on natural gas. It's also a contrarian bet; there's plenty of negative sentiment swirling this stock. Nevertheless, it's dirt cheap. Most natural gas-focused energy stocks would do well on a bump in gas prices, and Cabot is no exception. The company focuses buying premium oil and gas properties and maximizing returns on its wells. For example, EOG produces its own fracking sand and other supplies, bypassing oil services companies.
As with most oil and gas companies, lower prices had EOG's third-quarter earnings pumping mud. EOG's price looks decent, at 15 times forward earnings estimates. And Susquehanna's Biju Perincheril is bullish about the company's ability to grow free cash flow FCF — the cash profits a company generates annually after making the capital expenditures necessary to maintain the business — over the next couple years.
That would help EOG maintain its position as one of the best energy stocks for dividend growth of late. As with most of the exploration and production plays on this list, EOG stock should soar if oil prices do rebound. As the largest pipeline company in the U. It has a virtual monopoly on transporting carbon dioxide, too, which is used to enhance oil recovery from existing wells.
At 19 times next years' estimated earnings, it's more expensive than many energy stocks, but not outrageously so. The Permian, in the Southwest, is one of the largest oil-producing regions in North America. And its production has grown as fracking has grown.
Pioneer has about , drilling locations there, and many of those were acquired relatively cheaply in the s before the fracking boom, Morningstar director Dave Meats says. Part of this reflects the generally gloomy outlook for oil: Much of the global economy is slowing, but oil supply is expanding, largely due to American fracking.
The U. At current oil prices, Pioneer's stock looks like a bargain. If there's a steep decline in oil, however, the stock will stay that way. You want oil? The company is planning to boost spending on plants and equipment — a particular boost for refined products — and has added to its oil output through discoveries in Guyana and acquisitions in the Permian Basin and Mozambique. The company's third-quarter earnings would make the toughest oilman cry.
Unusually, earnings from its downstream sector — chemicals and other refined products — fell, too. But you can make gasoline from oilmen's tears. The energy stock yields a robust 5. Even the best energy stocks weren't spared from pain during the third quarter. The year experienced plenty of global market volatility. Oil penny stocks seem to be moving higher in the market, but not all penny stocks are. This reaction is attributed to the opening of most economies in the world within a few weeks.
The opening of global economies affects oil penny stocks. Most penny stocks act independently — broader markets might decline but penny stocks will still fly high. Oil penny stocks are penny stocks of small companies, which deal in the oil and gas industry. These stocks offer short-, medium- and long-term investment opportunities. As a trader, you can enjoy the flexibility and make money from penny stocks.
You can maximize your premiums by trading in stocks, which have low share prices and high upside potential. Penny stocks trade outside the top market exchanges. A lot of speculation and high risk is associated with these small-cap stocks. The specific definition of penny stocks varies among different countries. Just like other stocks, penny stocks offer an opportunity for potential investment.
Penny stocks have the following traits:. The oil and gas industry is experiencing 2 global disasters: the COVID pandemic and the oil price wars. This caused oil and gas stock prices to drop. With many people implementing social distancing , motor vehicles were not in use. With oil stocks on the upswing, the stock market has a lot of opportunities for investors. There have been global output cuts of crude oil due to the low demand for oil in many countries. Also, the strained relationship between the U.
If the friction leads to the erosion of the Phase 1 trade agreement, this will affect the oil prices negatively. More uncertainty in the U. Despite having high risks, oil penny stocks have a possibility of yielding very high returns from low investment. Oil penny stocks are regulated at a national level by a stock exchange. The U.
These stocks have the following features:. Penny stocks are placed in their independent category known as a trade-to-trade basket. This is because of the high risk associated with them. Penny stocks can be traded both in and outside the stock exchange. Transactions are done on a gross basis. Although these small caps offer a wonderful investing opportunity with plenty in the market, you need to know which ones to avoid and which ones to trade.
You can use a stock screener , which is a smart trading program. A stock screener helps you identify exciting oil penny stocks. To be a pro at trading penny stocks, you need to come up with trading strategies. Following these trading strategies could help you make money in the short, medium and long term. Webull, founded in , is a mobile app-based brokerage that features commission-free stock and exchange-traded fund ETF trading. Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling.
TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools.
Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.
When it comes to oil penny stocks, you need all the intel you can gather. Information from analysts should be part of your trading strategy. Your penny stocks trading strategy could benefit you in a high-risk trading environment. Consistent research will help you make a more informed decision in trading. The only problem is finding these stocks takes hours per day. You can today with this special offer:. Click here to get our 1 breakout stock every month.
Find and compare the best penny stocks in real time. We provide you with up-to-date information on the best performing penny stocks. Learn how to invest in penny stocks the right way. Our penny stock guide provides you with simple and easy to follow instructions for Discover the best penny stock brokers in Weigh the pros and cons of each broker to make an informed decision.
Looking for good, low-priced stocks to buy? Disclaimer: These stocks are not stock picks and are not recommendations to buy or sell a stock.
Operating margins are running at Debts are very low at only This provides a whole lot of stability and capability in the market. The company did move to retain more cash both for investment as well as for a cushion. This in turn meant that dividend distributions are now yielding 3.
That distribution level will likely hold steady through Then, we should see a rise in distributions for a higher yield. But what is really impressive is that the stock is trading at a discount to its intrinsic value. This makes for a bargain buy even as shares have returned Enterprise Product Partners is one of the leading petroleum midstream pipeline and related asset companies in the U.
With thousands of miles of pipe, it connects production fields to industrial, power, transport and distribution companies in and around the U. The company is set to report for the second quarter on July 29, but it appears from various reports that demand for liquified natural gas LNG — as well as for crude for export — was better than expected. Note, while renewable energy continues to expand in the U. Enterprise has a history of dependable revenue from its toll taker pipes and related assets.
This growth stems from a recent low back in And the company has always been frugal on the cost side, resulting in operating margins running at a pretty fat level of As a heavy cash generator, the company tends to keep less on hand. Its current ratio percentage of cash and equivalents against current liabilities out to one year is now at 0. But, its debt is just Plus, its assets are very hard to replicate.
As a pass-through, it avoids corporate taxes and passes through profits to unit holders with a current tax-advantaged yield of 9. It does retain some earnings for further development — which as noted earlier are expanding, if at a more risk-controlled level. Enterprise Product Partners has a price-book ratio of 1.
These levels are still quite discounted despite the rebound in shares. KMI was founded and is run by the legendary Rich Kinder. Formally a pass-through, the company integrated its assets as a regular corporation to make it more attractive for institutional investors as well as others. It turns out many market participants prefer to avoid tax-advantaged pass-through companies and the related K-1 tax form filings.
The company owns and runs a vital collection of natural gas and related products that makes it the largest midstream company in North America. From gas to crude, Kinder is plugged into the leading production fields and customers throughout the U. It sold its major Canadian assets to avoid continued delays and legal fights. And it is also a leading transporter and harvester of carbon dioxide CO2 which meets environmental, social and governance ESG objectives and sets it up for credits and tax advantages going forward.
Kinder Morgan recently reported second-quarter results, and the company missed estimates. This is thanks to a drop in product demand as well as an overall slower economy. And like for Enterprise, Kinder runs profitably with operating margins at a whopping And as a cash machine, it does keep its current ratio a bit lower. But its credit is good and its debts are lower at Plus, its pipeline assets are hard to replicate, making them arguably more valuable.
And even with the lesser targeted increases in the works, it is pledging to increase the distributions. The company and the stock are getting noticed with a return since March 18 to date of But it is still cheap with the stock valued at a mere 1. Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps — and into safe, top-performing income investments.
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Related Articles. Oil OPEC vs. Partner Links. Oil Refinery Definition An oil refinery is an industrial plant that refines crude oil into petroleum products such as diesel, gasoline and heating oils. Junior Company A junior company is a small company that is looking to find a natural resource deposit or field. Integrated Oil and Gas Company An integrated oil and gas company is a business entity that engages in the exploration, production, refinement, and distribution of oil and gas.
Crude Oil Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials.
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