The energy sector’s growth remains robust, with oil prices touching record highs. Currently, India has emerged as the leading source of growth in global oil consumption and is expected to account for 25% of total oil consumption growth globally in 2024 and 2025.
Given the industry tailwinds, now might be an opportune time to consider investing in top-tier energy stocks like Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), and EOG Resources, Inc. (EOG) for massive gains.
Amid the weak global oil demand, particularly from China, and the accelerating production outside the group, OPEC+ has pushed the start of oil output rises to April. It has also extended its full unwinding of cuts by a year until the end of 2026. However, the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) remain confident in future growth.
According to OPEC’s World Oil Outlook 2024, global energy demand is expected to expand by 24% between 2024 and 2050 period, driven by significant expansion in the non-OECD region. Oil’s demand is set to reach over 120 million barrels a day by 2050, with anticipation of reaching even higher levels.
On a similar note, IEA projected world oil demand to grow by 920 kb/d this year and by 1 mb/d in 2025, reaching 102.8 mb/d and 103.8 mb/d, respectively. Further, global oil supply showed an increase of 290 kb/d in October to 102.9 mb/d, fueled by the increased supply from Libyan barrels. Also, IEA expects global gas demand to rise over 2.5% in 2024 and follow similar trends in 2025.
In the last session, Brent crude settled at $72.09 per barrel, while U.S. West Texas Intermediate (WTI) reached $68.30 per barrel.
Considering the industry’s conducive trends, let’s delve into the fundamentals of the top Energy – Oil & Gas stocks, beginning with number 3.
Stock #3: Exxon Mobil Corporation (XOM)
XOM engages internationally in the exploration and production of crude oil and natural gas. The company operates in segments like Upstream; Energy Products; Chemical Products; and Specialty Products.
On November 20, XOM and LG Chem signed a non-binding MOU for a multiyear offtake agreement for up to 100,000 metric tons of lithium carbonate. The lithium will be supplied from XOM’s planned project in the U.S. to LG Chem’s cathode plant in Tennessee, which LG Chem expects to be the largest of its kind in the U.S.
The transaction is aimed at strengthening the U.S. critical mineral supply chain and contributing to domestic energy security, manufacturing, jobs, and emission reductions.
XOM’s total revenues and other income were $90.02 billion during the third quarter that ended September 30, 2024. Net income attributable to ExxonMobil totaled $8.61 billion, and its EPS was $1.92 for the period, respectively.
Furthermore, the company’s total assets stood at $461.92 billion as of September 30, 2024, versus $376.32 billion as of December 31, 2023.
Analysts expect XOM's revenue for the fourth quarter (ending December 2024) to grow 5.2% year-over-year to $88.76 billion. The consensus revenue estimate for the fiscal year 2024 of $354.93 billion indicates 3% year-over-year growth. Moreover, it topped the consensus revenue and EPS estimates in three of the trailing four quarters.
Over the past six months, XOM’s stock has gained 1.5% and 14.3% over the past year to close the last trading session at $114.78.
XOM’s POWR Ratings reflect its bright prospects. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has a B grade for Quality, Momentum, and Stability. It is ranked #41 among the 77 stocks in the Energy – Oil & Gas industry.
In addition to the POWR Ratings we’ve stated above, we also have given other XOM ratings for Sentiment, Growth, and Value. Get all XOM ratings here.
Stock #2: Chevron Corporation (CVX)
CVX is engaged in integrated energy and chemicals operations internationally. The company operates in two segments: Upstream and Downstream. It explores, develops, produces, and transports crude oil and natural gas. It is also in the processing, liquefaction, transportation, and regasification of liquefied natural gas.
On November 1, CVE’s Board of Directors declared a quarterly dividend of $1.63 per share, payable on December 10, 2024, to all holders of common stock at the close of business on November 18, 2024.
CVX’s annual dividend of $6.52 translates to a yield of 4.12% at the current share price. Its four-year average dividend yield is 4.12%. Moreover, the company’s dividend payouts have increased at a CAGR of 7.1% over the past three years and 6.5% over the past five years. CVX has raised its dividends for 37 consecutive years.
On October 1, CVX entered into a strategic collaboration with Honeywell International Inc. (HON) to develop advanced artificial intelligence (AI)--assisted solutions that will assist operators in making decisions to enhance efficiency for refining processes and improve safety within the industrial automation space.
CVX reported total revenues and other income of $50.67 billion for the third quarter that ended September 30, 2024. Net earnings attributable to CVX stood at $4.49 billion or $2.48 per common share, reflecting increases of 1.2% and 2.1% from the prior year’s period, respectively. Also, its free cash flow increased 12% year-over-year to $5.60 billion.
Additionally, CVX’s cash and cash equivalents and total assets totaled $4.70 billion and $259.23 billion as of September 30, 2024.
Street expects CVX’s revenue for the fourth quarter (ending December 2024) to increase 3% year-over-year to $48.61 billion. The company’s EPS for the same quarter is expected to be $2.41. Moreover, CVX surpassed the consensus EPS estimates in three of the trailing four quarters.
CVX’s stock has surged 3.3% over the past month and 11.5% over the past year to close the last trading session at $159.33.
CVX’s bright outlook is reflected in its POWR Ratings. CVX has a B grade for Quality, Stability, and Momentum. CVX is ranked #33 in the list of 77 stocks in the same industry.
Click here to access additional CVX ratings for Sentiment, Growth, and Value.
Stock #1: EOG Resources, Inc. (EOG)
EOG explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas, primarily in producing basins internationally.
On November 8, EOG’s Board of Directors declared a dividend of $0.975 per share on its common stock. The dividend will be paid on January 31, 2025, to stockholders of record as of January 17, 2025. The new dividend reflects an indicated annual rate of $3.90 per share, a 7% increase from the previous level.
EOG’s dividend yield is 3% at the current share price. Its four-year average dividend yield is 4.79%. Also, the company’s dividend payouts have grown at 31.2% CAGR over the past three years. EOG has raised its dividends for seven consecutive years.
During the third quarter, which ended September 30, 2024, EOG posted total operating revenues and other of $5.96 billion, and its operating income was $2.09 billion for the same quarter. The company’s free cash flow grew 8.5% from the year-ago value to $1.49 billion.
Furthermore, the company’s adjusted net income came in at $1.64 billion and $2.89 per share for the quarter, respectively.
Street expects EOG’s revenue for the second quarter (ending June 2025) to increase marginally year-over-year to $6.03 billion. Its revenue for the fiscal year 2025 is expected to increase 2% year-over-year to $24.46 billion. Furthermore, the company has topped the consensus revenue estimates in all four trailing quarters.
Over the past six months, EOG’s stock has gained 8.1% and 6.6% over the past year to close the last trading session at $130.02.
EOG’s sound fundamentals are reflected in its POWR Ratings. The stock has an A grade for Quality and a B grade for Stability. Within the Energy – Oil & Gas industry, EOG is ranked #22 of 77 stocks.
Click here to access other ratings of EOG for Sentiment, Growth, Momentum, and Value.
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XOM shares were trading at $114.06 per share on Friday afternoon, down $0.72 (-0.63%). Year-to-date, XOM has gained 17.97%, versus a 29.02% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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