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Welcome to Episode #434 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The oil stocks were left for dead in 2026 as earnings were expected to continue to decline on weak oil prices. But then the Iran War happened. Oil prices, both WTI and Brent, rose above $90 a barrel.
The war, and higher oil prices, have held for three weeks. Countries are now drawing down their Strategic Petroleum Reserves (SPRs), but that is not enough barrels to bring the price down.
Higher oil prices are expected to stick around.
How to Invest for Higher Oil Prices
There are many ways to invest in the oil industry, but when prices rise, investors should be looking at the oil producers. Most of the producers are unhedged, which means they have not entered into hedging contracts on the price of oil. Therefore, when oil prices rise, so do the company’s revenue and earnings.
Oil prices have been higher for most of the last month of the first quarter, which will likely mean earnings will be rising.
As a result, oil analysts have begun raising their earnings estimates for 2026.
Buy North American Oil Producers
This oil price rise is different from 2022’s price rise which happened as the result of the Ukraine/Russia War. In 2022, while prices spiked on fears that sanctions on Russian oil would tighten the oil market, those fears eased over a few months.
In 2026, there is currently the largest worldwide oil supply disruption since 1950. But not all oil comes out of the Middle East. North America remains a huge player in oil production, with the United States now the largest oil producer in the world.
Many North American oil and gas producers drill only in the Americas. It is a way to play the rise in oil prices without having exposure to the Middle East.
3 Oil Stocks for 2026
There are currently no Zacks Rank #1 (Strong Buy) stocks among the United States oil and natural gas producers. Most of the companies are #3 (Hold) stocks.
But look for that to change if the price of oil remains over $90 for several more weeks. In 2022, Brent oil traded above $100 a barrel for 110 days. Oil producers saw rising earnings during that time.
EOG Resources is a large cap oil and natural gas producer with production in the Permian Basin and other key basins in the United States. It has international production in Trinidad and Tobago. In 2025, it also partnered with UAE and Bahrain to drill in the Middle East. That drilling only began in Feb 2026 and is a very small part of EOG’s business.
EOG Resources is still predominantly an American driller. In 2025, it generated $4.7 billion in free cash flow and returned 100% of it to shareholders in the form of dividends and share buybacks.
Analysts have been adjusting 2026 earnings estimates in the last week. One has been revised higher, but one also has been revised lower. But the 2026 Zacks Consensus has jumped to $9.91 from $9.43 in the last week. Earnings are still going to be down 2.5% compared to 2025.
Shares of EOG Resources are up 98% in the last 5 years and have jumped 12.7% in the prior month. It’s still attractively priced, with a forward price-to-earnings (P/E) ratio of 14. A P/E under 15 usually indicates value.
Diamondback Energy is a large cap oil and natural gas producer with a market cap of $43.5 billion. It drills in the Permian Basin in the United States.
Analysts are growing bullish. Two estimates were revised higher in the last 7 days for 2026 which pushed the Zacks Consensus Estimate up to $10.76 from $9.66. That’s still 19.5% below 2025 earnings which were $13.37.
Shares of Diamondback were up 154% over the last 5 years and gained 9.4% in the prior month. Diamondback Energy is still attractively priced with a forward P/E of 17.7. It pays a dividend, currently yielding 2.2%.
Magnolia Oil & Gas is a mid-cap oil and natural gas producer which drills in the Giddings in Texas. It has a market cap of $5.7 billion.
The analysts are bullish on Magnolia. One analyst has raised earnings estimates for 2026 in the last week. That has pushed the Zacks Consensus up to $1.78 from $1.63 in that time. That’s just 0.6% below 2025 where the company made $1.79.
Shares of Magnolia Oil & Gas have taken off in the last month, adding 13.5% to new all-time highs. It is up 163% over the last 5 years.
Magnolia Oil & Gas trades with a forward P/E of 17.2. It also pays a dividend, yielding 2.2%.
Should Magnolia Oil & Gas be on your short list?
What Else Should You Know About Buying North American Oil Producer Stocks Right Now?
Tune into this week’s podcast to find out.
[In full disclosure, Zacks Value Investor portfolio owns shares of EOG.]
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Key Takeaways
Welcome to Episode #434 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
The oil stocks were left for dead in 2026 as earnings were expected to continue to decline on weak oil prices. But then the Iran War happened. Oil prices, both WTI and Brent, rose above $90 a barrel.
The war, and higher oil prices, have held for three weeks. Countries are now drawing down their Strategic Petroleum Reserves (SPRs), but that is not enough barrels to bring the price down.
Higher oil prices are expected to stick around.
How to Invest for Higher Oil Prices
There are many ways to invest in the oil industry, but when prices rise, investors should be looking at the oil producers. Most of the producers are unhedged, which means they have not entered into hedging contracts on the price of oil. Therefore, when oil prices rise, so do the company’s revenue and earnings.
Oil prices have been higher for most of the last month of the first quarter, which will likely mean earnings will be rising.
As a result, oil analysts have begun raising their earnings estimates for 2026.
Buy North American Oil Producers
This oil price rise is different from 2022’s price rise which happened as the result of the Ukraine/Russia War. In 2022, while prices spiked on fears that sanctions on Russian oil would tighten the oil market, those fears eased over a few months.
In 2026, there is currently the largest worldwide oil supply disruption since 1950. But not all oil comes out of the Middle East. North America remains a huge player in oil production, with the United States now the largest oil producer in the world.
Many North American oil and gas producers drill only in the Americas. It is a way to play the rise in oil prices without having exposure to the Middle East.
3 Oil Stocks for 2026
There are currently no Zacks Rank #1 (Strong Buy) stocks among the United States oil and natural gas producers. Most of the companies are #3 (Hold) stocks.
But look for that to change if the price of oil remains over $90 for several more weeks. In 2022, Brent oil traded above $100 a barrel for 110 days. Oil producers saw rising earnings during that time.
1. EOG Resources, Inc. (EOG - Free Report)
EOG Resources is a large cap oil and natural gas producer with production in the Permian Basin and other key basins in the United States. It has international production in Trinidad and Tobago. In 2025, it also partnered with UAE and Bahrain to drill in the Middle East. That drilling only began in Feb 2026 and is a very small part of EOG’s business.
EOG Resources is still predominantly an American driller. In 2025, it generated $4.7 billion in free cash flow and returned 100% of it to shareholders in the form of dividends and share buybacks.
Analysts have been adjusting 2026 earnings estimates in the last week. One has been revised higher, but one also has been revised lower. But the 2026 Zacks Consensus has jumped to $9.91 from $9.43 in the last week. Earnings are still going to be down 2.5% compared to 2025.
Shares of EOG Resources are up 98% in the last 5 years and have jumped 12.7% in the prior month. It’s still attractively priced, with a forward price-to-earnings (P/E) ratio of 14. A P/E under 15 usually indicates value.
Should EOG Resources be on your short list?
2. Diamondback Energy, Inc. (FANG - Free Report)
Diamondback Energy is a large cap oil and natural gas producer with a market cap of $43.5 billion. It drills in the Permian Basin in the United States.
Analysts are growing bullish. Two estimates were revised higher in the last 7 days for 2026 which pushed the Zacks Consensus Estimate up to $10.76 from $9.66. That’s still 19.5% below 2025 earnings which were $13.37.
Shares of Diamondback were up 154% over the last 5 years and gained 9.4% in the prior month. Diamondback Energy is still attractively priced with a forward P/E of 17.7. It pays a dividend, currently yielding 2.2%.
Should Diamondback Energy be on your short list?
3. Magnolia Oil & Gas Corp. (MGY - Free Report)
Magnolia Oil & Gas is a mid-cap oil and natural gas producer which drills in the Giddings in Texas. It has a market cap of $5.7 billion.
The analysts are bullish on Magnolia. One analyst has raised earnings estimates for 2026 in the last week. That has pushed the Zacks Consensus up to $1.78 from $1.63 in that time. That’s just 0.6% below 2025 where the company made $1.79.
Shares of Magnolia Oil & Gas have taken off in the last month, adding 13.5% to new all-time highs. It is up 163% over the last 5 years.
Magnolia Oil & Gas trades with a forward P/E of 17.2. It also pays a dividend, yielding 2.2%.
Should Magnolia Oil & Gas be on your short list?
What Else Should You Know About Buying North American Oil Producer Stocks Right Now?
Tune into this week’s podcast to find out.
[In full disclosure, Zacks Value Investor portfolio owns shares of EOG.]