3 Top Oil Stocks For July
Crude prices haven't behaved as expected this year, ending the first half down double digits and settling in the mid-$40s. That sell-off in the oil market has taken most oil stocks down with it, including several that are doing just fine at lower oil prices. Three that caught our eyes as being unfairly beaten down despite their prospects are Kinder Morgan (NYSE: KMI), Royal Dutch Shell (NYSE: RDS-A)(NYSE: RDS-B), and Helmerich & Payne (NYSE: HP). Here's why we think that July is a great time to buy this oil trio.
Matt DiLallo (Kinder Morgan): Energy infrastructure behemoth Kinder Morgan's stock has slumped about 6% this year due in part to the 17% dip in the price of crude. While sliding crude has some impact on the company since it does produce quite a bit of oil, it has 78% of this year's production hedged at $59 per barrel, which is well above the current price. Further, 91% of its earnings come from fee-based pipelines and terminals, which generate rather steady cash flow no matter what prices are doing. Add it up, and 97% of its cash flow is either hedged or fee-based, which is why Kinder Morgan fully expects to generate $4.46 billion of distributable cash flow this year, or about $1.99 per share.
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Source: Fool.com
