Best oil stocks of 2021

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Although many oil companies have retreated from their mid-decade highs, the best oil stocks remain among the richest in dividends in the market. Many of these companies have run businesses conservatively – converting their vast oil reserves into cash for shareholders. Others have turned more aggressively to renewables, including onshore / offshore wind, solar power and biofuels. As the world shifts to cleaner energy, you can expect these companies to adapt to a changing world.

Last data update: February 10, 2021 at 9:10 p.m. EST

Frequently Asked Questions

1. What are the best oil stocks?

The best oil stocks have natural monopolies around their companies. Pipeline companies like Enterprise Product Partners (NYSE:DEP) and Pioneer of natural resources (NYSE:PXD) use their dominant positions to pay dividends of around 10%. Meanwhile, the oil service company Schlumberger (NYSE:SLB) operates as a near-monopoly in drilling services through its high-tech methods of extracting shale oil.

Because oil itself is a commodity, the best oil companies must differentiate themselves from other than low prices.

2. Are oil stocks a good investment?

The biggest oil companies are still alive and well – even with more renewables, the demand for oil and gas will remain for decades. Several shale oil producers, such as Devon Energy Group (NYSE:DVN) and Apache (NASDAQ:APA) have even become known as “Democratic Darlings” for their ability to meet new regulatory requirements. Others have invested entirely in greener energy; companies like Chénière Energy (NYSE:LNG) are now looking to export liquefied natural gas to fuel growth.

3. Is it unethical to buy oil stocks?

Many executives in the oil industry have long been concerned about their environmental impact. The best of them quickly came to apply their knowledge to the development of renewable energies. PA (NYSE:PA) has long been a leader in wind power generation in the United States, while the French company Total (NYSE:EARLY) appears on track to produce 35 gigawatts of solar power by 2025. Not all oil companies are so forward-looking – Exxon Mobil (NYSE:XOM) ranks last among oil majors in renewable energies. But for every laggard in the oil industry, many more are busy building a greener future.

4. Can you buy oil stocks?

Investors can buy oil prices directly through ETFs like the United States Petroleum Fund (NYSEARCA:OSU). But there is a catch. Because oil itself does not generate profits or dividends, buying the commodity is generally not profitable in the long run: the USO has lost 87% since 2014. Oil producers, pipelines and oil companies exporters, on the other hand, can generate investors. profits by adding value to the oil they extract and process.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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Felix J. Dixon