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Stay Ahead of Market Swings With BP, PBF, VLO & MPC
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Key Takeaways
BP, PBF, VLO and MPC stand out as low-beta energy stocks amid market volatility and elevated oil prices.
BP's upcoming projects, PBF's high refinery utilization & VLO's diverse crude sourcing support their outlooks.
MPC's strong cash flow supports shareholder returns, while its refining system is the largest in the nation.
Uncertainty and fears continue to dominate the stock market as oil prices remain high due to Middle East tensions. With the market expected to remain highly volatile, it is advisable for investors to increase their allocation to low-beta stocks. Companies that seem good bets now are BP plc (BP - Free Report) , PBF Energy (PBF - Free Report) , Valero Energy Corporation (VLO - Free Report) and Marathon Petroleum Corporation (MPC - Free Report) .
What Does Beta of a Stock Measure?
Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
Screening Criteria Using Research Wizard:
We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.
Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank Equal to 1 (Strong Buy): Zacks Rank #1 stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are four of the 18 stocks that qualified:
BP
BP’s production outlook seems bright, thanks to its major projects, which are expected to begin operations between 2028 and 2030 and moving forward as planned. Once operational, these projects could help BP increase production and generate more cash. BP is working to improve its refining business by making better use of its refineries, trading operations and customer networks. The British energy giant benefits from its ability to buy crude oil from different markets and sell refined products where demand is stronger.
PBF Energy
PBF Energy is among the leading refiners in the United States. High refinery utilization amid resilient U.S. demand is expected to continue offsetting the negative impacts of elevated input costs, driven by high oil prices. This should boost PBF’s bottom line.
Valero Energy
Regarding the company’s access to diverse crude feedstocks, Valero has an advantage because its Gulf Coast refineries can buy crude oil from many low-cost sources, including the United States, Canada and Venezuela. This gives the company more flexibility to purchase cheaper oil, which helps keep refining costs low and can boost profits when competitors have fewer sourcing options.
Marathon Petroleum
Marathon Petroleum is a well-known name in the energy industry, operating the United States’ largest refining system. MPC is highly committed to returning capital to shareholders, reflecting the company’s strong cash flow generation and efficient management of its finances.
View the Zacks #1 Rank List
Image: Bigstock
Stay Ahead of Market Swings With BP, PBF, VLO & MPC
Key Takeaways
Uncertainty and fears continue to dominate the stock market as oil prices remain high due to Middle East tensions. With the market expected to remain highly volatile, it is advisable for investors to increase their allocation to low-beta stocks. Companies that seem good bets now are BP plc (BP - Free Report) , PBF Energy (PBF - Free Report) , Valero Energy Corporation (VLO - Free Report) and Marathon Petroleum Corporation (MPC - Free Report) .
What Does Beta of a Stock Measure?
Beta measures the volatility or risk of a particular asset compared to the market. In other words, beta measures the extent of a security’s price movement relative to the market. In this article, we are considering the S&P 500 as the market.
If a stock has a beta of 1, then the price of the stock will move with the market. So, the stock is more volatile than the market if its beta is more than 1. In the same way, the stock is not as volatile as the market if its beta is less than 1.
For example, if the market offers a return of 20%, a stock with a beta of 3 will return 60%, which is overwhelming. Similarly, when the market slips 20%, the stock will sink 60%, which is devastating.
Screening Criteria Using Research Wizard:
We have taken a beta between 0 and 0.6 as our prime criterion for screening stocks that are less volatile than the market. However, this should not be the only factor to be considered while selecting a winning strategy. We need to take into account other parameters that can add value to the portfolio.
Percentage Change in Price in the Last 4 Weeks Greater Than Zero: This ensures that the stocks saw positive price movement over the last month.
Average 20-Day Volume Greater Than 50,000: A substantial trading volume ensures that the stocks are easily tradable.
Price Greater Than or Equal to $5: They must all be trading at a minimum of $5 or higher.
Zacks Rank Equal to 1 (Strong Buy): Zacks Rank #1 stocks indicate that they will significantly outperform the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are four of the 18 stocks that qualified:
BP
BP’s production outlook seems bright, thanks to its major projects, which are expected to begin operations between 2028 and 2030 and moving forward as planned. Once operational, these projects could help BP increase production and generate more cash. BP is working to improve its refining business by making better use of its refineries, trading operations and customer networks. The British energy giant benefits from its ability to buy crude oil from different markets and sell refined products where demand is stronger.
PBF Energy
PBF Energy is among the leading refiners in the United States. High refinery utilization amid resilient U.S. demand is expected to continue offsetting the negative impacts of elevated input costs, driven by high oil prices. This should boost PBF’s bottom line.
Valero Energy
Regarding the company’s access to diverse crude feedstocks, Valero has an advantage because its Gulf Coast refineries can buy crude oil from many low-cost sources, including the United States, Canada and Venezuela. This gives the company more flexibility to purchase cheaper oil, which helps keep refining costs low and can boost profits when competitors have fewer sourcing options.
Marathon Petroleum
Marathon Petroleum is a well-known name in the energy industry, operating the United States’ largest refining system. MPC is highly committed to returning capital to shareholders, reflecting the company’s strong cash flow generation and efficient management of its finances.