Crude oil has rocketed more than 60% this year to around $100 a barrel due to the war with Iran. That has fueled a surge in energy stocks, with the average one in the S&P 500 rallying more than 28%.
This year’s turmoil in the global energy market is a reminder of how vital oil is to the economy. Here are three top oil stocks to buy and hold for decades.
Image source: Getty Images.
These oil companies should have plenty of fuel to continue growing in the coming decades.
Crude oil has rocketed more than 60% this year to around $100 a barrel due to the war with Iran. That has fueled a surge in energy stocks, with the average one in the S&P 500 rallying more than 28%.
This year’s turmoil in the global energy market is a reminder of how vital oil is to the economy. Here are three top oil stocks to buy and hold for decades.
Image source: Getty Images.
Chevron
Chevron (CVX +0.26%) built its business to thrive in any environment. The oil company can thrive at lower prices. It can fund its capital spending plan and dividend at an average oil price below $50 a barrel through 2030. Meanwhile, it can grow its free cash flow at a more than 10% compound annual rate through 2030 at $70 oil. Chevron has a vast global oil and gas resource base and data-driven exploration capabilities to support its growth in the coming decades.
The energy giant is also using some of its oil-fueled cash flows to invest in lower-carbon energy to prepare its business for the future. It’s investing in renewable fuels (biodiesel and renewable natural gas), hydrogen, lithium, and carbon capture and storage. Additionally, Chevron is investing in natural gas power plants to support AI’s energy needs.
Chevron
Today’s Change
(0.26%) $0.48
Current Price
$185.69
Chevron will continue supplying the global economy with the oil it desperately needs in the coming decades. It will also play an important role in providing it with more lower-carbon energy in the future. That should give it ample fuel to continue increasing its dividend (3.8% current yield), which it has done for 39 straight years.
Enbridge
Enbridge (ENB 0.56%) is a leading North American energy infrastructure company. It operates the longest and most complex crude oil pipeline system on the continent, transporting 30% of the crude oil produced in North America. Enbridge is also a leader in natural gas, transporting 20% of U.S. gas consumption and operating the largest gas utility franchise in North America. Additionally, Enbridge is a leader in renewable energy investment.
Enbridge
Today’s Change
(-0.56%) $-0.30
Current Price
$53.00
The Canadian pipeline and utility company generates very stable cash flow, as 98% of its earnings come from cost-of-service or contracted assets. Enbridge currently has 39 billion Canadian dollars ($28.5 billion) in expansion projects under construction, which should enter service through the early 2030s. It’s pursuing another CA$50 billion ($36.6 billion) in expansion opportunities through 2030. These expansion projects should provide Enbridge with the fuel to grow earnings at a mid-single-digit annual rate, supporting continued dividend increases (current yield of 5.3%). Enbridge has raised its dividend for 31 straight years.
ExxonMobil
ExxonMobil (XOM +0.26%) is a global energy giant. Its strategic focus in recent years has been on improving profitability. Exxon’s strategy has been to invest heavily in its advantaged resources (the lowest-cost and highest-margin assets) while also reducing structural costs.
ExxonMobil
Today’s Change
(0.26%) $0.39
Current Price
$149.30
The company strategy has it on track to grow its earnings capacity by $25 billion and cash flow by $35 billion by 2030. That’s double-digit annualized growth compared to 2024’s level. Exxon’s strategy would see it generate about $145 billion in cumulative surplus cash by 2030, giving it the funds to repurchase shares and continue increasing its dividend (a 2.8% yield), which it has done for 43 straight years.
Meanwhile, Exxon has plenty of growth beyond 2030. It has extensive oil and gas resources worldwide to support rising energy demand. Additionally, Exxon is investing in several new businesses, including lithium, hydrogen, and specialty products such as its Proxxima thermoset resin systems. These businesses have the potential to reach $13 billion in earnings by 2040 and offer Exxon significant growth potential in the coming decades.
Excellent oil stocks to hold for the long haul
This year’s surge in oil prices is a reminder of the fuel’s importance to the global economy. Oil stocks can also play a vital role in your portfolio by helping offset the impact of higher energy prices, while also providing growth as energy demand rises. Chevron, Enbridge, and Exxon are three of the top oil stocks to buy and hold for the long haul.
