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Stay Ahead of Market Uncertainty With BP, XOM, COP and E
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Key Takeaways
BP, XOM, COP and E offer low-beta exposure amid market volatility.
ExxonMobil and ConocoPhillips benefit from elevated crude prices.
BP's upstream expansion and Eni's LNG growth support long-term prospects.
Uncertainty and fear continue to dominate the stock market as oil prices remain high amid Middle East tensions. Investors are also closely watching the upcoming U.S. midterm elections to assess how the results could influence stock market performance. 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) , ExxonMobil Holdings Corporation (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Eni S.p.A. (E - 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 29 stocks that qualified:
BP
BP's upstream portfolio offers long-term growth potential, supported by its focus on developing oil and gas resources across key markets. The ramp-up of major projects and increased production from its U.S. onshore operations highlight its ability to strengthen underlying output. Moreover, BP's efforts to advance exploration and development opportunities in Trinidad and Tobago, Venezuela and the Gulf of America could expand its production base, improve future earnings potential and support long-term cash generation.
ExxonMobil
West Texas Intermediate (“WTI”) crude is trading at more than $100 per barrel. The high prices are being driven by intensifying conflicts in the Middle East. The U.S. Energy Information Administration in its latest short-term energy outlook projected WTI at $88.21 per barrel for this year, higher than $65.40 last year. A highly favorable oil pricing environment is likely to continue supporting ExxonMobil’s exploration and production activities, which generate the majority of its earnings.
ConocoPhillips
ConocoPhillips is also well-positioned to capitalize on the ongoing high crude pricing environment. This is because COP is a major upstream energy company with a strong presence in the Lower 48, comprising prolific plays like Delaware Basin, Midland Basin, Eagle Ford and Bakken.
Eni S.p.A.
E is well-positioned for long-term growth, supported by its expanding upstream portfolio, promising exploration prospects and disciplined capital allocation. The company's ongoing development projects across Africa, Asia and the Mediterranean are expected to strengthen its production base, while growing LNG operations could provide additional earnings opportunities.
View the Zacks #1 Rank List
Image: Shutterstock
Stay Ahead of Market Uncertainty With BP, XOM, COP and E
Key Takeaways
Uncertainty and fear continue to dominate the stock market as oil prices remain high amid Middle East tensions. Investors are also closely watching the upcoming U.S. midterm elections to assess how the results could influence stock market performance. 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) , ExxonMobil Holdings Corporation (XOM - Free Report) , ConocoPhillips (COP - Free Report) and Eni S.p.A. (E - 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 29 stocks that qualified:
BP
BP's upstream portfolio offers long-term growth potential, supported by its focus on developing oil and gas resources across key markets. The ramp-up of major projects and increased production from its U.S. onshore operations highlight its ability to strengthen underlying output. Moreover, BP's efforts to advance exploration and development opportunities in Trinidad and Tobago, Venezuela and the Gulf of America could expand its production base, improve future earnings potential and support long-term cash generation.
ExxonMobil
West Texas Intermediate (“WTI”) crude is trading at more than $100 per barrel. The high prices are being driven by intensifying conflicts in the Middle East. The U.S. Energy Information Administration in its latest short-term energy outlook projected WTI at $88.21 per barrel for this year, higher than $65.40 last year. A highly favorable oil pricing environment is likely to continue supporting ExxonMobil’s exploration and production activities, which generate the majority of its earnings.
ConocoPhillips
ConocoPhillips is also well-positioned to capitalize on the ongoing high crude pricing environment. This is because COP is a major upstream energy company with a strong presence in the Lower 48, comprising prolific plays like Delaware Basin, Midland Basin, Eagle Ford and Bakken.
Eni S.p.A.
E is well-positioned for long-term growth, supported by its expanding upstream portfolio, promising exploration prospects and disciplined capital allocation. The company's ongoing development projects across Africa, Asia and the Mediterranean are expected to strengthen its production base, while growing LNG operations could provide additional earnings opportunities.