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These 3 Top-Ranked Energy Stocks Pay Investors Nicely
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The Zacks Oils and Energy Sector has been hot in 2022, up more than 35% and easily outperforming the S&P 500.
For those looking to tap into the relative strength, Exxon Mobil Corp. (XOM - Free Report) , Valero Energy Corp. (VLO - Free Report) , and Phillips 66 (PSX - Free Report) could all be considerations.
All three sport a favorable Zacks Rank and carry solid dividend payouts, undoubtedly a strong pairing.
Below is a year-to-date chart illustrating the share performance of all three companies with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have enjoyed a stellar run in 2022, leaving the S&P 500 in the dust. Let’s take a deeper dive into each one.
Exxon Mobil Corp.
Exxon Mobil is one of the largest publicly traded international oil and gas companies, holding an industry-leading inventory of resources.
XOM’s earnings outlook has turned visibly bright over the last several months, helping land it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Exxon Mobil’s annual dividend yield comes in at 3.3%, notably higher than that of the S&P 500. Further, the company carries a 2.4% five-year annualized dividend growth rate paired with a sustainable 36% payout ratio.
Image Source: Zacks Investment Research
The company generates substantial cash; in its latest earnings release, XOM reported quarterly free cash flow of a mighty $17.3 billion, penciling in a sizable 60% sequential uptick and an even more considerable triple-digit 151% year-over-year increase.
Image Source: Zacks Investment Research
Keep an eye out for XOM’s upcoming quarterly release on October 28th; the Zacks Consensus EPS Estimate of $3.88 suggests a Y/Y uptick in earnings of nearly 150%.
Valero Energy Corp.
Valero Energy is the largest independent refiner and marketer of petroleum products in the United States, with refineries located in the U.S., Canada, and the United Kingdom. VLO sports a Zacks Rank #2 (Buy).
Analysts have upped their earnings outlook across all timeframes over the last 60 days.
Image Source: Zacks Investment Research
Valero Energy’s annual dividend yields a solid 3.1% paired with a payout ratio sitting at 23% of its earnings. In addition, VLO has upped its dividend payout three times over the last five years, translating to a 6.1% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
The company is on an impressive earnings streak, exceeding both revenue and earnings estimates in each of its last six quarterly reports. Just in its latest print, VLO registered a 2% EPS beat and a 14% sales beat.
Image Source: Zacks Investment Research
Phillips 66
Phillips 66 operations include processing, transporting, storing, and marketing fuels and products worldwide.
Like the stocks above, analysts have been bullish regarding their earnings outlook over the last several months, helping push PSX into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Phillips 66 rewards its shareholders via its annual dividend that yields 3.9% paired with a payout ratio sitting at 27% of its earnings.
The company has also grown its dividend nicely; PSX has upped its dividend payout four times over the last five years, with a 5.6% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
PSX’s free cash flow has been on a solid uptrend off 2020 lows, as seen in the chart below.
In its latest quarter, the company posted free cash flow of $1.4 billion, reflecting a 3.2% Y/Y uptick and an even larger 84% sequential uptick.
Image Source: Zacks Investment Research
Bottom Line
While the majority of the market has sailed through rough waters in 2022, stocks in the Zacks Oils and Energy sector have entirely shaken off the market’s woes, going on a stellar run.
All three stocks above - Exxon Mobil Corp. (XOM - Free Report) , Valero Energy Corp. (VLO - Free Report) , and Phillips 66 (PSX - Free Report) – sport a favorable Zacks Rank, telling us that they’ve witnessed their near-term earnings outlook turn bright as of late.
And for the cherry on top, all three pay their investors handsomely.
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These 3 Top-Ranked Energy Stocks Pay Investors Nicely
The Zacks Oils and Energy Sector has been hot in 2022, up more than 35% and easily outperforming the S&P 500.
For those looking to tap into the relative strength, Exxon Mobil Corp. (XOM - Free Report) , Valero Energy Corp. (VLO - Free Report) , and Phillips 66 (PSX - Free Report) could all be considerations.
All three sport a favorable Zacks Rank and carry solid dividend payouts, undoubtedly a strong pairing.
Below is a year-to-date chart illustrating the share performance of all three companies with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, all three stocks have enjoyed a stellar run in 2022, leaving the S&P 500 in the dust. Let’s take a deeper dive into each one.
Exxon Mobil Corp.
Exxon Mobil is one of the largest publicly traded international oil and gas companies, holding an industry-leading inventory of resources.
XOM’s earnings outlook has turned visibly bright over the last several months, helping land it into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Exxon Mobil’s annual dividend yield comes in at 3.3%, notably higher than that of the S&P 500. Further, the company carries a 2.4% five-year annualized dividend growth rate paired with a sustainable 36% payout ratio.
The company generates substantial cash; in its latest earnings release, XOM reported quarterly free cash flow of a mighty $17.3 billion, penciling in a sizable 60% sequential uptick and an even more considerable triple-digit 151% year-over-year increase.
Image Source: Zacks Investment Research
Keep an eye out for XOM’s upcoming quarterly release on October 28th; the Zacks Consensus EPS Estimate of $3.88 suggests a Y/Y uptick in earnings of nearly 150%.
Valero Energy Corp.
Valero Energy is the largest independent refiner and marketer of petroleum products in the United States, with refineries located in the U.S., Canada, and the United Kingdom. VLO sports a Zacks Rank #2 (Buy).
Analysts have upped their earnings outlook across all timeframes over the last 60 days.
Image Source: Zacks Investment Research
Valero Energy’s annual dividend yields a solid 3.1% paired with a payout ratio sitting at 23% of its earnings. In addition, VLO has upped its dividend payout three times over the last five years, translating to a 6.1% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
The company is on an impressive earnings streak, exceeding both revenue and earnings estimates in each of its last six quarterly reports. Just in its latest print, VLO registered a 2% EPS beat and a 14% sales beat.
Image Source: Zacks Investment Research
Phillips 66
Phillips 66 operations include processing, transporting, storing, and marketing fuels and products worldwide.
Like the stocks above, analysts have been bullish regarding their earnings outlook over the last several months, helping push PSX into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Phillips 66 rewards its shareholders via its annual dividend that yields 3.9% paired with a payout ratio sitting at 27% of its earnings.
The company has also grown its dividend nicely; PSX has upped its dividend payout four times over the last five years, with a 5.6% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
PSX’s free cash flow has been on a solid uptrend off 2020 lows, as seen in the chart below.
In its latest quarter, the company posted free cash flow of $1.4 billion, reflecting a 3.2% Y/Y uptick and an even larger 84% sequential uptick.
Image Source: Zacks Investment Research
Bottom Line
While the majority of the market has sailed through rough waters in 2022, stocks in the Zacks Oils and Energy sector have entirely shaken off the market’s woes, going on a stellar run.
All three stocks above - Exxon Mobil Corp. (XOM - Free Report) , Valero Energy Corp. (VLO - Free Report) , and Phillips 66 (PSX - Free Report) – sport a favorable Zacks Rank, telling us that they’ve witnessed their near-term earnings outlook turn bright as of late.
And for the cherry on top, all three pay their investors handsomely.