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Zacks Market Edge Highlights: XLE, Exxon Mobil, Chevron, Pioneer Natural Resources and Diamondback Energy
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For Immediate Release
Chicago, IL – September 30, 2021 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Are Energy Stocks Finally in a Bull Market?
Welcome to Episode #287 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week she’s going solo to discuss the one sector that has entered into a new secular bull market: energy.
The Most Hated Sector?
Energy has been the most hated sector for several years but after oil plunged, and actually went negative, in the coronavirus sell-off last year, many investors gave up on the sector.
Over the last 5 years, the Energy Select SPDR ETF (XLE - Free Report) , is down 27% even as the S&P 500 has rallied 100% and the NASDAQ has soared 175%.
Who would buy energy stocks with that track record?
How Bear Markets End
While bull markets end with a bang, bear markets end with no fanfare at all.
In fact, most never even notice that a bear market has ended because the asset class is usually so ignored, and little followed, that no one cares about it anymore.
Such is the case with the oil stocks in 2021, even though it was the best performing S&P 500 sector in the first six months of the year, investors have stayed out of the stocks.
It’s just 3% of the S&P 500 compared to technology stocks, which are 40% of the index.
How to Invest for the Energy Bull Market
But what if the 13-year bear market IS finally over in the energy sector?
How should investors be playing it?
Many investors have already been diving in on the big oil companies, such as Exxon (XOM - Free Report) and Chevron (CVX - Free Report) because they are the biggest companies in the sector and pay juicy dividends, yielding over 5%.
Exxon’s dividend is paying 6% and Chevron’s is paying 5.3%.
But while they should be beneficiaries in an energy bull market, the nimble exploration and production companies should be even bigger winners.
Buy the Best Balance Sheets
There are a lot of explorers investors could choose from. To narrow down the list, look at those with the best balance sheets.
Pioneer Natural Resources (PXD - Free Report) is one of those. It’s a big driller in the Permian with a market cap of $41 billion.
It’s paying a dividend, yielding 1.9% and has also been paying an additional variable dividend as its free cash flow soars in these strong market conditions.
Diamondback Energy (FANG - Free Report) is another big Permian explorer. It recently announced a $2 billion share repurchase program in addition to its quarterly dividend, which is currently paying a 2% yield.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Market Edge Highlights: XLE, Exxon Mobil, Chevron, Pioneer Natural Resources and Diamondback Energy
For Immediate Release
Chicago, IL – September 30, 2021 – Zacks Market Edge is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here:
Are Energy Stocks Finally in a Bull Market?
Welcome to Episode #287 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
This week she’s going solo to discuss the one sector that has entered into a new secular bull market: energy.
The Most Hated Sector?
Energy has been the most hated sector for several years but after oil plunged, and actually went negative, in the coronavirus sell-off last year, many investors gave up on the sector.
Over the last 5 years, the Energy Select SPDR ETF (XLE - Free Report) , is down 27% even as the S&P 500 has rallied 100% and the NASDAQ has soared 175%.
Who would buy energy stocks with that track record?
How Bear Markets End
While bull markets end with a bang, bear markets end with no fanfare at all.
In fact, most never even notice that a bear market has ended because the asset class is usually so ignored, and little followed, that no one cares about it anymore.
Such is the case with the oil stocks in 2021, even though it was the best performing S&P 500 sector in the first six months of the year, investors have stayed out of the stocks.
It’s just 3% of the S&P 500 compared to technology stocks, which are 40% of the index.
How to Invest for the Energy Bull Market
But what if the 13-year bear market IS finally over in the energy sector?
How should investors be playing it?
Many investors have already been diving in on the big oil companies, such as Exxon (XOM - Free Report) and Chevron (CVX - Free Report) because they are the biggest companies in the sector and pay juicy dividends, yielding over 5%.
Exxon’s dividend is paying 6% and Chevron’s is paying 5.3%.
But while they should be beneficiaries in an energy bull market, the nimble exploration and production companies should be even bigger winners.
Buy the Best Balance Sheets
There are a lot of explorers investors could choose from. To narrow down the list, look at those with the best balance sheets.
Pioneer Natural Resources (PXD - Free Report) is one of those. It’s a big driller in the Permian with a market cap of $41 billion.
It’s paying a dividend, yielding 1.9% and has also been paying an additional variable dividend as its free cash flow soars in these strong market conditions.
Diamondback Energy (FANG - Free Report) is another big Permian explorer. It recently announced a $2 billion share repurchase program in addition to its quarterly dividend, which is currently paying a 2% yield.
What else should you know about energy stocks?
Tune into this week’s podcast to find out.
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https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.