3 Top Large-Cap Stocks to Buy in March
After four months of rising crude oil prices, energy sector stocks are again getting some love from Wall Street. Yet despite their recent gains, most oil and natural gas stocks are trading below their pre-pandemic levels. Global demand for oil and natural gas is expected to rise appreciably in 2021 compared to 2020. And regardless of supply side uncertainties, higher demand would bode well for energy companies. In light of that, here are three top large-cap energy stocks to buy in March that look set to benefit from this continuing resurgence in demand.
Lower oil and natural gas prices severely hurt ExxonMobil's (NYSE: XOM) performance last year. The company posted an annual loss of $22 billion, including a one-time impairment charge of nearly $17 billion. ExxonMobil's cash from operations last year fell significantly short to cover its enormous capital expenditures and dividends. Further, lapses on the part of management resulted in loud calls for a change from investors.
The recovery in demand and prices, however, helped ExxonMobil during the fourth quarter. For that reason, its results improved sequentially, excluding the impairment charge. That recovery should continue this year unless oil prices plunge to levels similar to those that prevailed in 2020. Though ExxonMobil's performance suffers when there are steep declines in commodity prices, such drops have a history of reversing over time. Oil and gas companies use various means to weather such down periods. Preserving cash by lowering capital expenditures, engaging in cost reduction initiatives, cutting dividends, and selling assets are among the common options energy companies resort to in difficult market environments.
Source Fool.com
