Latest news with #PermianBasin
Globe and Mail
10 hours ago
- Business
- Globe and Mail
Can Disciplined Cost Management Fuel ExxonMobil's Future?
Exxon Mobil Corporation XOM emphasizes making its business more efficient and resilient. This is clear from its last earnings call, where it stated that since 2019, it has reduced $12.7 billion in structural costs. This means XOM is achieving the same or better results while spending less. On average, this saves about $2.5 billion annually, supporting ExxonMobil's bottom line in a volatile business environment. ExxonMobil mentioned on its recent earnings call that it aims to slash its breakeven costs to $35 per barrel by 2027 and $30 per barrel by 2030. Thus, XOM's upstream operations, which derive the majority of earnings, will probably remain profitable even if there is a plunge in oil prices in the future. It can also be said that the integrated major stands to earn substantially more from its upstream business, reflecting its strong footprint in the most prolific Permian basin, when prices climb. Importantly, XOM has aimed to lower its breakeven costs while maintaining its investment program. This will not only keep its operations profitable and resilient during a challenging business environment but also help it generate long-term value for shareholders while continuing to invest in major projects. Other Upstream Firms With Low Breakeven Costs: CVX, EOG According to Statista, a leading platform for data collection and visualization, the breakeven price in the Permian, especially in the Delaware and Midland sub-basins, is well below $40 per barrel. Hence, companies operating in the Permian, like Chevron Corporation CVX and EOG Resources Inc. EOG, are experiencing low breakeven prices. In 2024, CVX conducted 80% of its development activities in the Delaware basin. Chevron plans to increase the development program in the Delaware basin to 85% this year. This simplifies CVX's strong focus on low breakeven-cost operations, enabling it to maximize its profit. On its recent earnings call, EOG stated that it could easily handle all its planned spending for this year, even if oil prices trade in the low $50 per barrel. It means that to remain financially healthy, EOG does not need high oil prices. XOM's Price Performance, Valuation & Estimates Shares of XOM have declined 1% over the past year compared with the 2.8% fall of the composite stocks belonging to the industry. From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.77X. This is above the broader industry average of 4.14X. The Zacks Consensus Estimate for XOM's 2025 earnings hasn't been revised over the past seven days. XOM stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks' Research Chief Names "Stock Most Likely to Double" Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest. This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%. Free: See Our Top Stock And 4 Runners Up Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report EOG Resources, Inc. (EOG): Free Stock Analysis Report
Yahoo
15 hours ago
- Business
- Yahoo
All It Takes Is $2,000 Invested in Each of These 3 Dividend-Paying Energy Stocks to Help Generate Over $300 in Passive Income per Year
Diamondback Energy has considerable potential to deliver increasing returns for investors. Energy Transfer offers an ultra-high-yield dividend backed by strong free cash flow. Years of buybacks and solid earnings have pushed Equinor's valuation down to bargain-bin territory. 10 stocks we like better than Diamondback Energy › With the major stock market indexes reaching new all-time highs, investors may be questioning the benefit of a few percentage points of dividend yield. However, the value of dividend stocks isn't what they provide during a growth-driven rally in the stock market; rather, it is their distribution of passive income, no matter what the market is doing. Diamondback Energy (NASDAQ: FANG), Energy Transfer (NYSE: ET), and Equinor (NYSE: EQNR) are three dividend-paying energy stocks that can boost your passive income stream even if the stock market is going down. In fact, you can expect to generate around $314 in passive income per year by investing $2,000 into each stock. Here's what makes these three stocks particularly compelling buys now. Lee Samaha (Diamondback Energy): The decline in the stock price of the Permian Basin-focused oil and gas company, Diamondback, is in line with the fall in oil prices over the past year. While that's understandable from a sentiment perspective, it may not be logical, and certainly not for dividend-focused investors. Let's put it this way. Diamondback's management believes its base dividend of $4 a share is protected down to a price of oil of $37 a barrel. In addition, it has hedges in place down to $55 a barrel, meaning it will be able to sell at that price should the price fall below $55 a barrel. For reference, the $4-per-share base dividend equates to a 2.6% annual yield at the current price. Still, management has the financial flexibility to pay a variable dividend (last year's basic dividend plus the variable dividend totaled $6.21), and it can also buy back more shares, thereby increasing existing shareholders' claim on future cash flows. Moreover, in cutting its planned capital expenditures in 2025 in response to a weakening oil price, management has already demonstrated its willingness to preserve cash flow. However, ongoing conflict in the Middle East could lead to an oil price increase. Scott Levine (Energy Transfer): Operating about 140,000 miles of pipeline, Energy Transfer is a midstream powerhouse, moving crude oil, natural gas, and other products throughout the United States. In addition, Energy Transfer operates a variety of other energy infrastructure assets, including natural gas processing plants and crude oil terminals. As a result, the company generates strong free cash flow that suggests its 7.3% forward-yielding dividend is on solid ground. Smart investors know that high-yield dividends are alluring, but they mean little if strong financials do not back them. With respect to Energy Transfer, however, there's no need to reach for a red flag. Over the past five years, the company has generated ample free cash flow from which it can source its distributions. Plus, Energy Transfer is deploying significant capital -- about $5 billion in 2025 -- to grow its portfolio. The company plans to spend about $1.5 billion to expand its midstream assets in the Permian Basin, including the addition of processing plant capacity with the Arrowhead I and II projects. Looking ahead, management plans on returning an increasing amount of capital to investors, targeting annual distribution raises of 3% to 5%. Daniel Foelber (Equinor): When investors think of large, integrated oil and gas companies, names like ExxonMobil, Chevron, BP, and Shell may come to mind. But Norwegian energy giant Equinor is a hidden gem in the oil patch that looks like an excellent buy for July. Equinor completed a multi-year effort to return boatloads of cash to investors through outsized buybacks and a massive dividend. It has since scaled back that program to preserve cash, but Equinor still yields 5.9% at the time of this writing. And the buybacks have drastically reduced its share count to the tune of 16% over the last three years. Buybacks and Equinor's languishing stock price have reduced its valuation. In fact, Equinor is the least expensive U.S./European integrated major in terms of forward price to earnings (P/E). Forward P/E is the price of a stock divided by analyst projected earnings over the next year. As you can see in the chart, all of the integrated energy majors have attractive valuations -- but the European majors are significantly cheaper than ExxonMobil and Chevron. This makes sense given that ExxonMobil and Chevron have arguably the best overall production portfolios and the clearest path toward future earnings growth. Equinor was aggressively investing in renewables (namely offshore wind) to diversify its revenue stream and lower its carbon footprint. But the company's strategy has shifted in recent years due to a brutal downturn in the offshore wind industry. The good news is that Equinor has other pathways toward clean energy investments -- such as carbon capture and storage (CCS). The Norwegian company is a one of the largest CCS operators worldwide, and recent project advancements in Europe (like Northern Lights) and the company's ambitious carbon highway could provide a way to capture carbon dioxide (CO2) from high-emissions industrial areas in the Netherlands and Belgium and then store that CO2 offshore in Norway in the North Sea. Equinor can afford to fund these climate-focused efforts due to its strong free cash flow from its oil and gas portfolio. All told, Equinor stands out as a balanced buy for investors looking for a high-yield and inexpensive energy stock to buy now. Before you buy stock in Diamondback Energy, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Diamondback Energy wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Daniel Foelber has positions in Equinor Asa. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool recommends BP and Equinor Asa. The Motley Fool has a disclosure policy. All It Takes Is $2,000 Invested in Each of These 3 Dividend-Paying Energy Stocks to Help Generate Over $300 in Passive Income per Year was originally published by The Motley Fool
Yahoo
16 hours ago
- Business
- Yahoo
What Are the 5 Best Pipeline Stocks to Buy Right Now?
Energy Transfer and Enterprise Products Partners both have high yields and strong growth potential. Western Midstream, meanwhile, is more a yield-oriented investment, while Williams is a growth story. Genesis may have the most potential upside because the company is in the midst of a turnaround. 10 stocks we like better than Energy Transfer › The pipeline sector offers investors a nice mix of high yields, predictable cash flows, and solid growth. And with natural gas demand set to climb thanks to liquefied natural gas (LNG) exports and energy-hungry AI data centers, the midstream sector looks well positioned to deliver strong returns from here. My five favorite stocks in the pipeline space are: Energy Transfer (NYSE: ET), Enterprise Products Partners (NYSE: EPD), Western Midstream (NYSE: WES), The Williams Companies (NYSE: WMB), and Genesis Energy (NYSE: GEL). Each brings something different to the table for investors. Energy Transfer operates one of the largest midstream networks in the United States, and it's entering a clear growth phase. The company boosted its growth capital expenditure budget from $3 billion last year to $5 billion this year, with a focus on natural gas infrastructure tied to the Permian Basin. This puts it in a strong position as power demand spikes from AI data centers and LNG exports ramp up. The company already signed a deal with Cloudburst to directly supply natural gas to a prospective Texas data center, and it continues to get inbound interest for similar projects. Meanwhile, its long-delayed Lake Charles LNG export terminal looks increasingly likely to get the green light. About 90% of Energy Transfer's EBITDA is tied to fee-based contracts, with many having take-or-pay provisions, giving it steady and predictable cash flow. That supports a generous and well-covered distribution yielding 7.2%, with management targeting 3% to 5% annual growth. If you want bulletproof reliability, Enterprise Products Partners is about as steady as it gets. It has raised its distribution for 26 consecutive years through downturns, oil price crashes, and recessions. The reason? About 85% of its revenue is fee-based with inflation-linked escalators built into its contracts. Furthermore, many of its contracts are backed by take-or-pay terms, meaning it gets paid whether customers use its services or not. In addition, it has always maintained a conservative balance sheet. The result is steady, visible cash flow, quarter after quarter, and no stress from being over-leveraged with debt. Enterprise also has $7.6 billion in projects under construction, including $6 billion scheduled to come online this year. These are high-return expansions, much of them in the NGL value chain where the company is a dominant player. Despite its conservative approach, Enterprise isn't afraid to lean into growth opportunities, and it's doing exactly that right now. Enterprise is a solid option for investors who want dependable income and steady, long-term growth. If you like high yields, Western Midstream offers one of the highest in the space at 9.5%. But what makes it especially attractive is the quality of its cash flow. Most of its contracts include either cost-of-service protections or minimum volume commitments, which provide strong revenue visibility regardless of commodity prices. It's also one of the more conservatively run midstream names, with leverage below 3x and a distribution that's well covered. The company isn't chasing every growth project, but it's still investing where it sees solid returns. Its biggest project right now is the Pathfinder produced-water pipeline, an up to $450 million project that should be a solid EBITDA contributor when it ramps up. Western combines a high, sustainable payout with a measured growth strategy. That makes it a compelling stock to own over the long run. The Williams Companies may not yield as much as the other pipeline companies (its yield is currently around 3.2%) but it's got one of the best growth runways in the sector. Its crown jewel is its Transco pipeline system, which connects Appalachia's natural gas fields to the fast-growing Southeast and Gulf Coast. Transco continues to generate organic expansion projects, driven by coal-to-gas power plant conversions, rising LNG exports, and more recently, data center demand. The company has eight major expansions in its backlog that are scheduled to enter service between now and Q3 2030. Outside of its Transco expansion, Williams is moving into power generation with its Socrates project, a $1.6 billion investment to directly serve growing data center demand in Ohio. It's also taken a 10% stake in Cogentrix Energy, which will give it valuable power market insights to help optimize natural gas supply for next-gen power plants For investors focused more on growth than chasing the highest yield, Williams is an attractive option. Genesis Energy is different from the other stocks on this list. It doesn't have the consistent track record of Enterprise, the massive scale of Energy Transfer, the high yield of Western Midstream, or the growth of Williams. Instead, it's a turnaround story. The company recently sold its soda ash business for $1.4 billion and quickly used the proceeds to aggressively reduce debt and clean up its balance sheet. UBS estimates the move will help Genesis save $84 million a year in interest and preferred dividend payouts, which will boost future cash flow. Genesis is now turning its focus to growing its offshore pipeline system. When the Shenandoah and Salamanca deepwater projects, which will connect to Genesis' pipeline system, come online later this year it will add significant growth. In addition, the company's marine segment is on pace for record earnings this year, as volumes begin to normalize. Taken altogether, Genesis is laying the groundwork to see a significant turnaround in its business. While its yield is more modest at 3.8%, given the change in its cash-flow profile following the sale of its soda ash business and the growth set to come from its offshore pipeline business, it will have an opportunity to significantly ramp up its distribution in the future. Genesis is a higher-risk name, but the stock has strong upside potential if the company can continue to execute. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, Genesis Energy, and Western Midstream Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. What Are the 5 Best Pipeline Stocks to Buy Right Now? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20 hours ago
- Business
- Yahoo
How Exxon Mobil Corporation (XOM) Navigates Market Volatility While Maintaining Dividends
Exxon Mobil Corporation (NYSE:XOM) is included among the 11 Best Dividend Aristocrat Stocks to Invest in Now. Aerial view of a major oil rig in the middle of the sea, pumping crude oil. Volatile crude oil prices pose challenges for many producers, but ExxonMobil has positioned itself to weather such fluctuations with ease. After years of strategic planning, the company is built to perform well in a range of market conditions, making it a reliable long-term option for investors, even amid economic uncertainty. Exxon Mobil Corporation (NYSE:XOM)'s approach focuses on investing in high-quality, low-cost, high-margin assets while reducing its structural expenses. Key growth areas include the Permian Basin and offshore Guyana, where expanding production is helping to lower its overall supply costs and enhance profitability. Since 2019, the company has achieved $12.7 billion in structural cost savings. With its low-cost operations and strong financial position, Exxon Mobil Corporation (NYSE:XOM) offers a highly secure dividend, making it a dependable choice for income-focused investors. The company has raised its payouts for 42 years in a row and currently offers a quarterly dividend of $0.99 per share. As of June 27, the stock has a dividend yield of 3.62%. While we acknowledge the potential of XOM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure. None.
Yahoo
a day ago
- Business
- Yahoo
What Are the 5 Best Pipeline Stocks to Buy Right Now?
Energy Transfer and Enterprise Products Partners both have high yields and strong growth potential. Western Midstream, meanwhile, is more a yield-oriented investment, while Williams is a growth story. Genesis may have the most potential upside because the company is in the midst of a turnaround. 10 stocks we like better than Energy Transfer › The pipeline sector offers investors a nice mix of high yields, predictable cash flows, and solid growth. And with natural gas demand set to climb thanks to liquefied natural gas (LNG) exports and energy-hungry AI data centers, the midstream sector looks well positioned to deliver strong returns from here. My five favorite stocks in the pipeline space are: Energy Transfer (NYSE: ET), Enterprise Products Partners (NYSE: EPD), Western Midstream (NYSE: WES), The Williams Companies (NYSE: WMB), and Genesis Energy (NYSE: GEL). Each brings something different to the table for investors. Energy Transfer operates one of the largest midstream networks in the United States, and it's entering a clear growth phase. The company boosted its growth capital expenditure budget from $3 billion last year to $5 billion this year, with a focus on natural gas infrastructure tied to the Permian Basin. This puts it in a strong position as power demand spikes from AI data centers and LNG exports ramp up. The company already signed a deal with Cloudburst to directly supply natural gas to a prospective Texas data center, and it continues to get inbound interest for similar projects. Meanwhile, its long-delayed Lake Charles LNG export terminal looks increasingly likely to get the green light. About 90% of Energy Transfer's EBITDA is tied to fee-based contracts, with many having take-or-pay provisions, giving it steady and predictable cash flow. That supports a generous and well-covered distribution yielding 7.2%, with management targeting 3% to 5% annual growth. If you want bulletproof reliability, Enterprise Products Partners is about as steady as it gets. It has raised its distribution for 26 consecutive years through downturns, oil price crashes, and recessions. The reason? About 85% of its revenue is fee-based with inflation-linked escalators built into its contracts. Furthermore, many of its contracts are backed by take-or-pay terms, meaning it gets paid whether customers use its services or not. In addition, it has always maintained a conservative balance sheet. The result is steady, visible cash flow, quarter after quarter, and no stress from being over-leveraged with debt. Enterprise also has $7.6 billion in projects under construction, including $6 billion scheduled to come online this year. These are high-return expansions, much of them in the NGL value chain where the company is a dominant player. Despite its conservative approach, Enterprise isn't afraid to lean into growth opportunities, and it's doing exactly that right now. Enterprise is a solid option for investors who want dependable income and steady, long-term growth. If you like high yields, Western Midstream offers one of the highest in the space at 9.5%. But what makes it especially attractive is the quality of its cash flow. Most of its contracts include either cost-of-service protections or minimum volume commitments, which provide strong revenue visibility regardless of commodity prices. It's also one of the more conservatively run midstream names, with leverage below 3x and a distribution that's well covered. The company isn't chasing every growth project, but it's still investing where it sees solid returns. Its biggest project right now is the Pathfinder produced-water pipeline, an up to $450 million project that should be a solid EBITDA contributor when it ramps up. Western combines a high, sustainable payout with a measured growth strategy. That makes it a compelling stock to own over the long run. The Williams Companies may not yield as much as the other pipeline companies (its yield is currently around 3.2%) but it's got one of the best growth runways in the sector. Its crown jewel is its Transco pipeline system, which connects Appalachia's natural gas fields to the fast-growing Southeast and Gulf Coast. Transco continues to generate organic expansion projects, driven by coal-to-gas power plant conversions, rising LNG exports, and more recently, data center demand. The company has eight major expansions in its backlog that are scheduled to enter service between now and Q3 2030. Outside of its Transco expansion, Williams is moving into power generation with its Socrates project, a $1.6 billion investment to directly serve growing data center demand in Ohio. It's also taken a 10% stake in Cogentrix Energy, which will give it valuable power market insights to help optimize natural gas supply for next-gen power plants For investors focused more on growth than chasing the highest yield, Williams is an attractive option. Genesis Energy is different from the other stocks on this list. It doesn't have the consistent track record of Enterprise, the massive scale of Energy Transfer, the high yield of Western Midstream, or the growth of Williams. Instead, it's a turnaround story. The company recently sold its soda ash business for $1.4 billion and quickly used the proceeds to aggressively reduce debt and clean up its balance sheet. UBS estimates the move will help Genesis save $84 million a year in interest and preferred dividend payouts, which will boost future cash flow. Genesis is now turning its focus to growing its offshore pipeline system. When the Shenandoah and Salamanca deepwater projects, which will connect to Genesis' pipeline system, come online later this year it will add significant growth. In addition, the company's marine segment is on pace for record earnings this year, as volumes begin to normalize. Taken altogether, Genesis is laying the groundwork to see a significant turnaround in its business. While its yield is more modest at 3.8%, given the change in its cash-flow profile following the sale of its soda ash business and the growth set to come from its offshore pipeline business, it will have an opportunity to significantly ramp up its distribution in the future. Genesis is a higher-risk name, but the stock has strong upside potential if the company can continue to execute. Before you buy stock in Energy Transfer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Energy Transfer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Geoffrey Seiler has positions in Energy Transfer, Enterprise Products Partners, Genesis Energy, and Western Midstream Partners. The Motley Fool recommends Enterprise Products Partners. The Motley Fool has a disclosure policy. What Are the 5 Best Pipeline Stocks to Buy Right Now? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
