SPECIAL REPORT The Top 7 Stocks for 2024

3 Oil Stocks to Buy Heading Into December

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  • The bull case for each of the oil stocks below is compelling.
  • ExxonMobil (XOM): XOM is making a strong pivot away from hydrocarbon dependency, leaving the market feeling bullish.
  • Chevron (CVX): The company had a robust previous quarter, and its valuation is below its long-term average.
  • Canadian Natural Resources (CNQ): This is a momentum breakout stock amid soaring above analyst estimates.
oil stocks - 3 Oil Stocks to Buy Heading Into December

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The hydrocarbon industry has slowed amid concerns about the climate crisis and the transition to electric and hydrogen-powered vehicles. Still, oil stocks continue to generate massive free cash flow and commodity prices continue to surge in volatile swings.

Oil stocks will continue to have a place in the world despite the radical transformation of our energy and transportation sectors. It’s too much of an essential commodity that humanity has built societies around for as long as societies have existed — even before them.

Therefore, oil stocks are predicted to remain relevant for the foreseeable future, and due to them falling out of fashion recently, the market has provided some attractive bargains.

So, here are three of the best oil stocks to buy before December.

ExxonMobil (XOM)

Exxon Retail Gas Location
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ExxonMobil (NYSE:XOM) is a large-scale, integrated oil supermajor with a strong presence in the industry.

Now might be an excellent time to scoop up XOM shares. It recently announced plans to tap into extensive lithium reserves in North America. Production from the project is due to start sometime in 2027.

The bull case for XOM is strengthened through its strategic acquisitions, such as Pioneer Natural Resources (NYSE:PXD), which is part of its broader pivot away from hydrocarbon dependency.

Despite a recent dip in earnings and production flatlining, the company is on track with its high-end capital expenditure plans and remains a leader in energy transition. Considering these factors, it is one of the oil stocks to buy.

Chevron (CVX)

Chevron (CVX) sing with "diesel," "food mart" and "car wash" written underneath
Source: Sundry Photography / Shutterstock.com

Chevron (NYSE:CVX) is another major player in the oil industry. CVX stock showcased a robust previous quarter with reported earnings of $6.5 billion and adjusted earnings of $5.7 billion, a significant year-to-date return of cash to shareholders amounting to $20 billion and strategic growth through acquisitions such as PDC Energy. 

Chevron’s capital expenditures also increased, and worldwide oil-equivalent production rose by 4%.

Now might be a good time to load up on CVX shares. It trades at around 10x earnings, below its long-term historical averages. That is despite its fundamentals improving substantially, thus making it one of those oil stocks to buy in November.

Canadian Natural Resources (CNQ)

A magnifying glass zooms in on the website for Canadian Natural Resources (CNQ).
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Canadian Natural Resources (NYSE:CNQ) outperformed expectations last quarter with record production, leading to an adjusted earnings surge to CAD 2.59 per share, surpassing analyst predictions. 

The firm also plans to boost its oil sands output, further enhancing its already substantial presence in Western Canada, the U.K. North Sea and Offshore Africa.

CNQ stock, therefore, shows strong momentum due to its recent fundamentals and long-term prospects for growth. When looking at the company’s technicals, it shows a strong uptrend and is expected to accumulate in value for the rest of the month.

On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.


Article printed from InvestorPlace Media, https://investorplace.com/2023/11/3-oil-stocks-to-buy-heading-into-december/.

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