Oil and gas are one of the most volatile sectors for investors. When the price of this commodity falls, many consumers get relief at the gas pump, but oil and gas stocks are punished. The opposite is true when oil and gas prices rise, which has been the case since January of 2016. The price of crude oil has risen over 30% from its low of $42.57. And since January of 2018, crude oil is up almost 23%.
While customers may bear the cost of rising oil prices by paying more at the gas pump, the same companies that get punished from falling prices will benefit from rising prices. It is a macroeconomic truth, rising oil prices generally signal a growing economy. One reason for this is that in addition to delivering oil and gas, the price of oil and gas affects mining and exploration. Rising oil prices allow companies to fund these operations.
As an investor, the question becomes how can you profitably invest in this sector? With the popularity of Exchange-Traded Funds (ETFs), investors with a low-risk tolerance may find that owning the sector is sufficient to allow them to even out the volatility. However, not all oil and gas stocks are created equally. And, some of the major energy companies pay dividend yields that are among the highest in the industry. When it comes to being profitable from investing in this sector, it’s always a smart play to own the individual companies.
With that said, we’re providing a list of eight stocks that are already showing strength from the rising oil prices.
Click the "Continue to Slide #1" button to view the first company.
