Best Oil Stocks for 2022

 

While the oil market is still volatile, a slight imbalance in supply and demand can cause the price to spike. In early 2020, the world economy recovered from a pandemic and supplies were strained following Russia's invasion of Ukraine. As oil prices have continued to rise, investors should focus on companies that can weather rough patches and remain profitable. If the economy improves and oil prices rise, investors can benefit from a dramatic price increase.

Occidental Petroleum

If you're looking for an up and coming oil stock to buy, Occidental Petroleum might be worth a look. The company recently acquired Anadarko to expand its upstream business and benefit from higher oil prices. However, Occidental Petroleum's heavy debt load could be a risk in the future. The company is using its excess cash flow to repay debt and is leveraging its high benchmark prices to boost profits.

In May 2022, Occidental Petroleum (OXY) reported a 25.8% increase in earnings, and the company raised its price despite energy prices staying high. Moreover, it received a boost from Warren Buffett's increased stake. So, Occidental Petroleum is one of the best oil stocks to buy in 2022. Its share price has now increased by over 140% year-to-date.

Pioneer Natural Resources

Pioneer Natural Resources (PXD) is a company with a strong dividend yield and good cash flow generation. Historically, the company has increased its dividend by nearly 10% per year, and the CEO has made a decision to limit future hedging to the first half of 2022. Meanwhile, the company is making more money by pumping crude oil at a higher price, boosting its dividends. Investing in Pioneer Natural Resources now will pay off in the future.

In addition, Pioneer Natural Resources recently received a positive upgrade from the Zacks Investment Research team, elevating it to a Zacks Rank #1. This is an extremely strong ranking and suggests the stock could move higher in the near term. Five Zacks analysts hand-picked their favorite stocks to skyrocket more than 100% this year. Sheraz Mian, Director of Research at Zacks, has selected Pioneer Natural Resources as his top pick for the year. The stock has already soared 65% over the last year, but it is still dirt cheap. Pioneer Natural Resources' soaring 2022 earnings estimates and a recent $1.5 billion share repurchase plan all point to a strong long-term investment.

ExxonMobil

While the oil sector has experienced a boom and bust cycle over the last few years, investors have found that a few companies remain solid long-term investments. ExxonMobil, for example, has been focusing on lowering costs and increasing efficiency. These efforts will begin to pay off in 2022. This stock is still a long-term investment, but it has already improved its business by focusing on high-return assets and leveraging its massive scale. That makes it an excellent choice for those investors looking to make a profit in 2022.

The company also recently announced a large oil discovery off the coast of Namibia. The company has estimated that the discovery could yield as much as thirteen billion barrels, making it the largest deep-water oil field in history. Further details will follow, but for now, investors can get excited about this stock. The upside potential is considerable. Exxon stock is currently trading at a discount to its current earnings, but that may soon change.

Phillips 66

If you want to invest in the best oil stocks for 2022, you should look for those with solid dividend programs. You'll get an income stream while also capturing capital gains. Some of the best oil companies to look for are: Phillips 66, Chevron, and ConocoPhillips. These oil stocks are among the best dividend payers in the market, and their solid dividend programs make them excellent choices for a long-term income stream.

This company's first-quarter earnings were up 3%, and it improved its earnings in both the refining business and chemicals. Last month, Phillips 66 paid off $1.45 billion in debt, and it intends to resume repurchases. It also plans to raise dividends again. The company's forecast revenue growth in 2022 is 0.71%, which is below the average for the US Oil & Gas Refining & Marketing industry, which is expected to grow by 5.28% annually.