- Oil prices rose to record highs amid fears of supply disruption due to the Ukraine crisis.
- On Feb 11, oil prices saw an eight-year high over the mounting Russia-Ukraine tension.
- The OPEC+ countries missed their output target by over 900,000 barrels in January.
On Friday, oil prices climbed to nearly US$100 a barrel, the highest increase since 2014, over mounting tension between Russia and Ukraine. Russia is the world’s third-largest oil producer. Therefore, the geopolitical tensions involving Russia have impacted oil prices severely.
Moreover, the OPEC+ countries have not delivered on last year’s decision to increase the output by 400,000 barrels a day each month. They missed their output target by more than 900,000 barrels in January. Although the US has become self-reliant in oil supplies, the geopolitical tensions and limited supply of this natural resource affect the markets worldwide.
We will discuss the top five oil and gas stocks of the S&P 500.
Exxon Mobil Corporation (NYSE: XOM)
Market Cap: US$334 billion
Closing Price on January 14, 2022: US$78.98
The Irving, Texas-based ExxonMobil is an integrated oil and gas company. It is engaged in exploration, production, and refining of oil worldwide.
For the fourth quarter of 2021, the company reported a net income of US$813 million or US$1.18 per share diluted. Its cash flow from operating activities was US$1,632 million, and the free cash flow came in at US$1,233 million.
For the fiscal year 2021, its net income was US$2.48 billion or US$3.48 per share diluted. The company produced an average of 445,000 gross oil-equivalent barrels per day against 460,000 BPD in Q4, 2020. The fall in production was due to extreme cold weather in December 2021.
Its P/E ratio is 14.63, the forward P/E for one year is 11.71, the dividend yield is 4.39%, and the annualized dividend is US$3.52.
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Chevron Corporation (NYSE: CVX)
Market Cap: US$263.7 billion
Closing Price on January 14, 2022: US$136.67
Chevron is an integrated energy company engaged in producing, exploring, and refining oil and gas. It is based in San Ramon, California.
For the fourth quarter of 2021, the company reported earnings of US$5.1 billion or US$2.63 per share diluted. The full-year earnings were US$15.6 billion. Its cash flow from operations was US$29.2 billion in FY 2021. It paid US$11.6 billion in dividends and share repurchases in 2021.
Its P/E ratio is 16.8, the forward P/E for one year is 12.53, the dividend yield is 3.86%, and the annualized dividend is US$5.68.
ConocoPhillips (NYSE: COP)
Market Cap: US$119.2 billion
Closing Price on January 14, 2022: US$91.55
ConocoPhillips is an independent exploration and production firm based in Houston, Texas.
The company reported earnings of US$2.6 billion or US$1.98 per share diluted for the fourth quarter of 2021. For the full-year 2021, its earnings were US$8.1 billion, or US$6.07 per share diluted. It reported a preliminary year-end 2021 proven reserves of around 6.1 billion BOE.
Its P/E ratio is 15.11, the forward P/E for one year is 9.60, the dividend yield is 1.97%, and the annualized dividend is US$1.84.
EOG Resources, Inc. (NYSE: EOG)
Market Cap: US$66.35 billion
Closing Price on January 14, 2022: US$113.41
This Houston, Texas-based company is an oil and gas producer with acreage in the Permian Basin, the Bakken, and the Eagle Ford.
It will declare its fourth and full-year 2021 results on February 25, 2022.
For the quarter ended September 30, 2021, it posted revenue of US$4.76 billion and a net income of US$1.09 billion or US$1.88 per share diluted. The cash and equivalents were US$4.29 billion as of September 30, 2021.
Its P/E ratio is 21.94, the forward P/E for one year is 13.39, the dividend yield is 2.57%, and the annualized dividend is US$3.00.
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Marathon Petroleum Corporation (NYSE: MPC)
Market Cap: US$45.83 billion
Closing Price on January 14, 2022: US$81.19
Independent refiner Marathon Petroleum has 13 refineries in the US, with a total throughput capacity of 2.9 million barrels per day. The company is located in Findlay, Ohio.
For the fourth quarter of 2021, it reported a net income of US$774 million or US$1.27 per share diluted on the revenue of US$35.6 billion.
It repurchased approximately US$3 billion shares since October 31, 2021, and it covered around 55% of the US$10 billion repurchase program through January 31, 2022.
MPC had US$10.8 billion in cash and equivalents and short-term investments as of December 31, 2021. On February 2, it announced the board of directors’ approval for an incremental US$5 billion share buyback authorization.
Its P/E ratio is 5.28, the forward P/E for one year is 14.42, the dividend yield is 2.86%, and the annualized dividend is US$2.32.
Oil demand is gradually increasing as the worst phase of the pandemic is possibly over. But production and supply constraints continue to weigh on the market. The oil prices are sensitive to global developments.