Enrich your portfolio with these four global oil stocks

These are well-run diversified businesses that boast strong balance sheets, undeniable growth prospects and are trading at discounts to our fair value estimates

Vikram Barhat 18 September, 2019 | 1:06AM

Oil Barrels

Last week’s drone attacks on Saudi Arabia’s oil facilities caused one of the biggest disruptions to oil production ever. The attack sent crude prices rocketing global markets cratering, and prompted the U.S. to threaten a military response.

These developments have brought sharp focus on big energy stocks that are trading at an attractive discount to their fair value, despite the sector bouncing back from last year’s disastrous performance. The S&P 500 Energy Index has gained over 12% for the year to date, as of Sept 16. “A higher geopolitical risk premium in the crude price could boost the near-term earnings for oil and gas companies in our coverage in accordance with a stronger Brent futures curve,” says Morningstar analyst Mark Taylor. Longer term, geopolitical uncertainty is likely to continue to create strong tailwind for energy stocks, supported by healthy demand for oil and OPEC’s push for curbing oil production.

For investors looking to bump up or broaden their energy exposure, now may be a good time to look at leading oil giants. These are well-run diversified business operations that boast strong balance sheets, undeniable growth prospects and are well positioned to exploit favourable energy market dynamics including higher oil prices and demand, according to Morningstar equity research.

Total SA ADR

 

Ticker

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Chevron Corp85.23 USD3.01
Exxon Mobil Corp42.65 USD3.12
Royal Dutch Shell PLC ADR Class B30.31 USD2.71
Total SA ADR37.77 USD1.59

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a Toronto-based financial writer specializing in investing, stock markets, personal finance and other areas of the financial services industry. He also writes for CNBC, BBC, The Globe and Mail, and Toronto Star.

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