First quarter earnings season is off and running. While there’s a lot of buzz about the banks, there’s little about the energy sector. Yet energy was the best performing sector in the S&P 500 over the last 2 years. After a poor start to 2023, many have written off energy for this year.
But should they? What if energy were to make it three years in a row anyway?
OPEC+ recently announced production cuts which pushed WTI crude back up over $80. At $80, the explorers and producers are seeing great free cash flow. Many companies are paying dividends and variable dividends as an added bonus for shareholders.
Energy stocks are cheap and they’ve put together a strong earnings surprise track record the last few years.
Which energy stocks should you be watching over the next week?
5 Must-See Energy Earnings Charts
1. SLB (SLB)
SLB is a global technology company driving energy innovation. It has an amazing earnings surprise track record. It has beat every quarter for the last 5 years. It’s a true earnings all-star. SLB has managed to do this while there was a pandemic. It’s so impressive.
Shares of SLB have jumped 100% over the last 2 years but are actually down 1.6% year-to-date. Is this a buying opportunity?
SLB remains attractively valued, with a forward P/E of 17.4. The board also approved a 43% dividend increase for 2023 in January 2023. It is currently yielding 1.9%.
Should SLB be on your short list?
2. Halliburton (HAL)
Halliburton is one of the largest providers of products and services to the energy industry. It has only missed one time in the last 5 years and it was in 2018. That’s an impressive earnings surprise track record.
Shares of Halliburton have jumped 65% over the last 2 years but they are down 13.3% year-to-date. They’re also dirt cheap thanks to the sell-off. Halliburton trades with a forward P/E of just 11. It also pays a dividend, yielding 1.9%.
Is Halliburton a hidden gem?
3. Pioneer Natural Resources (PXD)
Pioneer Natural Resources is a large independent exploration and production company. It has beat on earnings 6 quarters in a row.
Shares of Pioneer Natural Resources are up 55% over the last 2 years but this year, they are down 0.5%. In April 2023, the Wall Street Journal reported that Pioneer Natural Resources and Exxon were in talks about a possible merger. Nothing has been announced, but the shares did pop on the news.
Pioneer Natural Resources is still cheap, with a forward P/E of 10.8. In 2022, it was also the top paying dividend stock in the S&P 500.
Should Pioneer Natural Resources be at the top of your list?
4. Exxon Mobil Corp. (XOM)
Exxon Mobil is one of the largest integrated oil companies in the world. It has beat on earnings 3 quarters in a row.
It’s been on a tear during this energy rally. Shares of Exxon Mobil are up 106% over the last 2 years. It’s also continued to have momentum in 2023, gaining another 5.7%.
It’s still cheap, with a forward P/E of 11.7. Exxon Mobil also pays a dividend, currently yielding 3.2%.
Is it too late to buy Exxon Mobil?
5. Chevron Corp. (CVX)
Chevron is the only company of these five that is coming off a miss last quarter. It has also actually missed 2 out of the last 4 quarters.
However, over the last 2 years, the shares have still rallied big, jumping 65%. Chevron shares have been weak in 2023, though, falling 4.9%.
It’s cheap with a forward P/E of 11.9. Chevron also has an attractive dividend, yielding 3.5%.
Is this weakness a buying opportunity in Chevron?
[In full disclosure, Tracey owns shares of PXD in her personal portfolio.]
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