Exxon Mobil Corporation XOM is a leading integrated energy player. In the past year, the firm, carrying a Zacks Rank #3 (Hold), has gained 7.7%, outpacing the 0.5% improvement of the composite stocks belonging to the industry.
What's Favoring the Stock?
The price of West Texas Intermediate crude is currently higher than the $70-per-barrel mark. The positive trajectory in oil price is a boon for ExxonMobil’s upstream operations. Also, it has a pipeline of key projects in the Permian – the most prolific basin in the United States – and offshore Guyana. In the Permian, ExxonMobil has an inventory of more than 8,000 well locations, with the integrated energy major estimating a net of 10 billion oil-equivalent barrels of recoverable resources. In offshore Guyana, it made several discoveries estimated at more than 10 billion oil-equivalent barrels of recoverable resource.
Like upstream businesses, ExxonMobil also benefits from its strong refinery utilization. The firm has solid support for transitioning to a lower-emission future. XOM said that its new initiatives related to lower emissions comprised four large-scale carbon capture and storage opportunities.
The upstream business of the integrated firm is highly exposed to volatility in oil and gas prices. Also, ExxonMobil is offering a lower dividend yield than the composite stocks belonging to the industry.
Stocks to Consider
Better-ranked players in the energy space include Enterprise Products Partners EPD, Sunoco LP SUN and Eni SpA E. While Enterprise Products and Sunoco sport a Zacks Rank #1 (Strong Buy), Eni carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enterprise Products has a stable business model and is not significantly exposed to the volatility in oil and gas prices. It generates stable fee-based revenues from its extensive pipeline network that spreads across more than 50,000 miles, transporting natural gas, natural gas liquids, crude oil petrochemicals and refined products.
Sunoco, a distributor of motor fuel to approximately 10,000 convenience stores, has a stable business model. For this year, SUN has witnessed upward earnings estimate revisions in the past 30 days.
Eni is a leading integrated energy player. By mid-century, Eni has a goal to achieve carbon neutrality, which is quite encouraging. In the past 30 days, the stock has witnessed upward earnings estimate revisions for this year.
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