Super Stock Blog

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Tag: BP

Best Company to Own in Oil Stocks

The oil stocks have all made a nice bullish rise in the past year.  Part of the reason was the election of Donald Trump and adding the previously CEO of Exxon to his cabinet staff.  This gives investors a more bullish outlet on the oil sector and their oil investments.

This also made huge gains in Exxon Mobile (XOM) and Chevron (CVX) stock price in the past few months.  British Petroleum (BP) also went up but it didn’t have the same appreciation gain.  BP also still wields at 6.7% dividend at the current stock price.  Exxon Mobile and Chevron hold less than a 4% dividend at their current stock price.

You should remember that British Petroleum has finalized the settlement with the government.  They have already sold the necessary assets to make the payments.  They are actually quite conservative compared to the other oil companies which I believe is a good thing as it is challenging to forsee the oil prices going forward.

You might have remembered an earlier blog post that I said BP follows a Plan B strategy.  This means the company believes that oil prices will remain stagnant so they are strategizing their oil investments for low oil prices.  This is counter to Exxon and Chevron which are building their portfolio to account for higher oil prices.

With a nice dividend and a undervalued outlook, British Petroleum (BP) should be on your radar for a nice oil company.  I do believe Exxon Mobile and Chevron (CVX) are a bit overvalued at their current price as well.  I am a holder in Chevron but I will be looking for a time in the immediate future to move some of those holdings to BP where I see much better chance at appreciation in the future.

Oil Stocks and Plan B

There has been a lot of discussion over the investing of oil stocks.  I, for one, believe there is great potential in oil stocks but there is a ongoing concern that oil prices will be low for a long time and this means that most investors don’t want to touch oil stocks.  Of course, most of these comments are coming from stock traders.  They want to get in and out when the market news comes out.  Personally, I don’t have the time nor the discipline to keep up with all the market hoopla (trends), up and down action of the day, and look at these stocks minute after minute.

As an investor, there is great potential in oil stocks.  First, you get a nice dividend.  BP is giving a dividend at 5.80% and COP is giving a dividend of 4.30%.  This means while you wait for the stock to appreciate you collect a nice premium.  I don’t know about you but oil is necessary and it will be necessary for a long time.  These two companies also follow a strategy called Plan B.  This means that they are strategizing their portfolio in the belief that oil prices will not rise soon.  Of course, this is a more conservative strategy than the other oil companies but its safer, less risky, and you are still collecting a nice dividend.

I recommend taking a look at both BP and COP as I own them and I will hold them for the long term!

Add Gas to Your Portfolio

I’m not talking about the gas you get from food or drink consumption.  It’s time for gas commodities to move up: crude oil and natural gas.  MarketClub has given me access to a technical analysis video for crude oil: check it out.  I think we hit a nice bottom, and it’s time for oil to move up.  It has reached such a low price for a commodity that will continually be needed in this world.  It’s like black gold.  I’d expect to see $60 per barrel of crude oil within the next few years again.  Although I expect it hit $60 probably within this year maybe even this summer when gas prices start moving up.

The Market Club video establishes that is a great time to get into USO.  I’m not too much a fan of this ETFs especially with so many undervalued gas stocks.  I’d suggest looking into PWE, Penn West Energy, a stock giving a dividend of over 11%.  It is able to sustain this dividend as long as oil stays above $50.  This is a great stock that is priced very low and it will easily double up as oil starts moving up.  You can’t see this type of action with the big oil companies.  If you are a more conservative investor, I’d suggest looking at BP, British Petroleum, at a price of $48 currently.  I earlier stated around $40 that it was a great buy, but if you have not got into it and your money is sitting in a bank account, you might as well buy some of this stock and get a nice 7% dividend.

On the natural gas commodity, there are multiple companies that are deeply in debt and it’s risky to buy any of them that can go bankrupt.  However, we can still play this market with the UNG, United States Natural Gas, a hedge on the natural gas.  Summer is coming up and natural gas will not be used that much, but with the recession ending and wide spread inflation coming up, expect commodities and natural gas to finally make its move up.  It’s reach lows such as $4 million British thermal units.  Just a few years ago, this would have been $12 mbtu.

Remember, we’re looking at the long term.  These are easy plays to make money within a few years time.