| Stock | Price | 52 Week Range | Marketcap | EPS | Dividend Yield | Chart (24H) | Sector | Employees | Last Updated |
|---|---|---|---|---|---|---|---|---|---|
| $30.98 | 20.35B | 5.40 | 4.71% | Energy | 1,900 | 4 hours ago | |||
| $47.84 | 44.89B | 3.65 | 1.87% | Energy | 12,570 | 4 hours ago |
3 Oil Stock Steals That Wall Street Is Overlooking
Investors, get ready to tune into an opportunity that’s flying under Wall Street’s radar. With stabilizing global oil prices and growing production, the oil sector is ripe with undervalued investment prospects. Today’s focus is on three unsung heroes of the oil stocks world that are not getting the attention they deserve from mainstream analysts. These stocks offer incredible potential and fit perfectly into the portfolio of any savvy investor looking to beat the market.
Why This Investing Opportunity is Exciting and Relevant
In today’s volatile market, it’s challenging to find opportunities that promise a robust return. Yet, the oil sector has been making headlines with Brent crude trading around $77 per barrel and West Texas Intermediate at $73. Experts forecast stability with Brent crude potentially averaging $84 per barrel, balancing global supply and demand dynamics perfectly. But wait—it gets better!
Non-OPEC+ production is anticipated to increase significantly, leading to a more substantial growth by around 1.4 million barrels per day (b/d), while OPEC+ will contribute a more modest rise of approximately 320,000 b/d as it eases voluntary output cuts. This overall oil supply is expected to grow by about 690,000 b/d in 2024. Such a stable price environment combined with a conducive supply-side setup creates a fertile ground for undervalued oil stocks, which are often hidden gems ignored by mainstream analysts.
This sets a compelling stage for investors craving high-reward opportunities that the mainstream market overlooks. For those of you eager to outsmart a market rigged by mainstream institutions, here are three oil stock steals you should pay attention to.
Devon Energy (DVN)
Devon Energy, a heavyweight in oil and gas production with a significant presence in the Delaware Basin, is a stock worth a second glance. Currently trading at $47.73, analysts have their eyes set on a buy, predicting a potential upside of 26.96%. The average price target from 15 analysts covering the stock is $60.60, emphasizing its underestimated market value.
Examining Devon Energy’s financial forecasts, revenue is expected to grow modestly by 0.86% this year to $15.39 billion and by another 4.59% next year to $16.10 billion. Although earnings per share (EPS) are projected to decline by 7.82% to $5.38 in 2024, they’re expected to rebound and grow by 7.21% to $5.77 in 2025. The company’s forward PE ratio of 8.69 is relatively low compared to the broader market, suggesting significant undervaluation.
Devon Energy’s operational efficiency and strategic positioning in the Delaware Basin allow it to maintain steady cash flows and financial stability. This combination of growth potential and value makes Devon Energy an enticing addition to any well-informed investor’s portfolio looking for long-term gains.
| Rating | Number of Ratings | Description |
|---|---|---|
| Strong Buy | 2 | Analysts who have given a strong buy rating on the stock in recent months. |
| Buy | 14 | Analysts have issued buy ratings on the stock. |
| Hold | 14 | Analysts have issued hold ratings on the stock. |
| Sell | 0 | Analysts have issued no sell ratings on the stock. |
| Moderate Buy | — | Devon Energy has a consensus rating of Moderate Buy, based on 14 buy ratings, 5 hold ratings, and no sell ratings. |
Marathon Oil (MRO)
Marathon Oil stands out as an independent exploration and production company focusing on unconventional resources in the United States. The stock showcases strong financial health, having generated $271 million in free cash flow and $239 million in adjusted free cash flow in the last quarter alone. Additionally, the company returned $349 million, or 41% of its adjusted cash flow from operations, to shareholders via share repurchases and its base dividend.
What makes Marathon Oil truly undervalued is its reaffirmation of full-year production and capital spending guidance. The company remains on track to deliver a robust 2024 program that benchmarks at the top of its peer group in terms of free cash flow, capital efficiency, and shareholder returns. Its ongoing low-risk gas developments are set to mitigate declines at other fields, indicating solid long-term prospects.
Marathon’s financial discipline and operational efficiency position it as a strategic investment for those seeking balanced growth and income. This underappreciated stock provides an enticing blend of reliability and potential for forward-looking investors eager to capitalize on market inefficiencies.
| Date | Rating |
|---|---|
| Feb 24 | Strong Buy (2) |
| Mar 24 | Buy (19) |
| Apr 24 | Buy (23) |
| May 24 | Buy (24) |
| Jun 24 | Buy (2) |
| Strong Sell | (0) |
| Hold | (4) |
Recent Analyst Recommendations by Rating Type:
- Strong Buy: 2 ratings
- Buy: 26 ratings
- Hold: 9 ratings
- Sell: 0 ratings
Average Analyst Price Target in the Past 3 Months: $33.41.
Occidental Petroleum (OXY)
Occidental Petroleum, a multinational energy juggernaut with a diversified presence in the United States, the Middle East, and Latin America, remains a compelling investment despite minor hiccups in earnings and revenues. The real clincher? Berkshire Hathaway’s 28.2% stake, driven by Warren Buffett. The continuous purchasing within the $57-$61.50 range signals Buffett’s confidence in the stock’s undervalued status.
Occidental’s Q1 2024 performance was noteworthy, generating $2 billion in operating cash flow. This robust cash flow is pivotal in maintaining the company’s diversified operations across multiple geographies, ensuring resilience and long-term growth potential. The current trading price around $64 implies opportunity for significant gains, especially with Buffett’s endorsement.
Warren Buffett’s ongoing investment, combined with Occidental’s solid cash flow and diversified operations, signals a strong growth trajectory for the company. This makes Occidental Petroleum a prudent choice for investors seeking a blend of stability and high upside potential in an otherwise overlooked sector.
| Analyst Rating Statistics | Recent Observations |
|---|---|
| Number of Ratings | 4 Buy, 23 Hold, 0 Sell |
| Number of Recommendations | Average Recommendation: Overweight |
| Average Target Price | $72.07 (past 3 months) |
| Recent Earnings Estimate | Next quarter: $0.91 (range: $0.58-$1.26) |
| Reputable Analysts | John Freeman (Raymond James: 15/19 Buy ratings) |
| Last Fiscal Year Estimate | $3.74 |
| Current Quarter Estimate | $0.63 |
| Year-Ago Earnings | $3.70 |
Key Insights for Investors
The undervaluation of Devon Energy, Marathon Oil, and Occidental Petroleum—backed by strategic company actions and a stable, promising oil price environment—presents a compelling case for investment. By offering a solid margin of safety coupled with growth prospects, these stocks cater to investors seeking substantial returns in an overlooked sector. Tap into the contrarian opportunities these oil stocks provide, and you may find yourself ahead of the mainstream curve.
