As Oil Rises, Here Are the Top 5 Names!

As oil continues its upward momentum, investors need to seriously consider investing is companies such as Suncor Energy Inc. (TSX:SU)(NYSE:SU) to receive both dividends and capital appreciation.

| More on:
The Motley Fool

As the price of oil begins to return to the previous glory of more than US$120 per barrel, investors need to take a step back and decide just what kind of exposure they seek. At a current price near US$74 per barrel, the positive momentum is only starting to be unleashed, as many companies in the oil space are once again planning to either restart or increase existing production.

The first name to consider is none other than Crescent Point Energy Corp. (TSX:CPG)(NYSE:CPG), which currently pays investors a dividend yield of almost 3.7%. The investment thesis is all about monetizing the existing assets on the balance sheet under a regime of higher oil prices. As one of the highest-cost producers in the industry, investors have the potential to make a substantial amount of money should oil prices move higher and remain there.

For those seeking a little less risk, shares of Suncor Energy Inc. (TSX:SU)(NYSE:SU) may be the best fit. As a vertically integrated producer and seller of oil, investors have the potential to benefit from the upside in the price of the black liquid without losing their shirts. Although the beta for this name remains a healthy 1.3, the low price for the year is no less than $36, as shares trade within a tighter range than most oil companies that are not as well diversified.

For investors seeking the lowest amount of risk, shares of Inter Pipeline Ltd. (TSX:IPL), which offer a dividend yield of almost 7%, are one of the very best investments available in the market today. As a pipeline company, revenues are derived from the movement of oil instead of the price of the commodity itself. Although a higher price of oil will motivate an increase in overall production, during both good and bad parts of the cycle, the yield has been sustainable, with investors starting to see some capital appreciation as time moves forward. In spite of this being one of the lowest-risk options on this list, it may very well be the best one!

On the U.S. side, shares of Exxon Mobil Corporation (NYSE:XOM) currently pay a 4% dividend yield, as the company continues to refine oil and will most probably increase the amount refined each month for the foreseeable future. Essentially, investors have the opportunity to make substantial gains from the “middleman” in the industry.

The last name (also in the United States) is none other than Schlumberger Limited. (NYSE:SLB), which is in the business of providing technological solutions to smaller oil production companies. As many projects are restarted and/or undertaken for the first time, the runway for increasing revenues and earnings will be a very long one. While investors remain patient, the dividend yield is no less than 3%, as the company is not only near a 52-week low, but also near a five-year low. Over the long term, investors stand to do very well by remaining patient with this security.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ryan Goldsman owns shares of INTER PIPELINE LTD.

More on Energy Stocks

edit Businessman using calculator next to laptop
Energy Stocks

If You’d Invested $5,000 in Brookfield Renewable Partners Stock in 2023, This Is How Much You Would Have Today

Here's how a $5,000 lump-sum investment in BEP.UN would have worked out from 2023 to present.

Read more »

Energy Stocks

Here Is Why Enbridge Is a No-Brainer Dividend Stock

For investors looking for a no-brainer dividend stock worth holding for the long term, here's why Enbridge (TSX:ENB) should be…

Read more »

Money growing in soil , Business success concept.
Energy Stocks

3 Canadian Energy Stocks Set for a Wave of Rising Dividends

Canadian energy companies are rewarding shareholders as they focus on sustainable financial performance.

Read more »

Solar panels and windmills
Top TSX Stocks

1 High-Yield Dividend Stock You Can Buy and Hold Forever

There are some stocks you can buy and hold forever. Here's one top pick that won't disappoint investors anytime soon.

Read more »

Oil pumps against sunset
Energy Stocks

Is it Too Late to Buy Enbridge Stock?

Besides its juicy and sustainable dividends, Enbridge’s improving long-term growth prospects make it a reliable stock to hold for the…

Read more »

oil and gas pipeline
Energy Stocks

Why TC Energy Stock Is Down 9% in a Month

TC Energy (TSX:TRP) stock has fallen by 9% in the last month, as it continues to divest assets to strengthen…

Read more »

Group of industrial workers in a refinery - oil processing equipment and machinery
Energy Stocks

If You Like Cenovus Energy, Then You’ll Love These High-Yield Oil Stocks

Cenovus Energy is a standout performer in 2024, but two high-yield oil stocks could attract more income-focused investors.

Read more »

Man considering whether to sell or buy
Energy Stocks

Is Enbridge Stock a Buy, Sell, or Hold?

Enbridge now offers a dividend yield near 8%.

Read more »