Got $10,000? 2 Top Oil Stocks to Buy for the Long Term
Oil and natural gas prices are high in 2022, but were painfully low in 2020, which highlights the inherent volatility of the sector. If you want to make sure you have some exposure to oil in your portfolio, you need to keep that in mind as you pick energy stocks. Shell (NYSE: SHEL) and ConocoPhillips (NYSE: COP) are two names you might want to look at, but for very different reasons.
If you've filled up your gas tank recently, you know that inflation is roaring. That's bad news for your wallet, but good news for oil and natural gas producers like ConocoPhillips. This company is somewhat unique among large energy companies in that it is focused solely on production, having spun off its midstream and refining assets many years ago. As such, ConocoPhillips' fortunes are more leveraged to oil and natural gas prices relative to other large names like ExxonMobil, which has a more diversified business model.
However, that's not all bad, as it makes ConocoPhillips something of an inflation hedge on the investment front. But it gets better than that, because the energy company also has a unique dividend structure. First, it pays a regular dividend that is fairly modest by industry standards. The dividend yield today is around 2.2% based on the regular $0.46 per share quarterly dividend. But in addition to this payment, the company may also make a special payment tied to the price of oil. The most recent special dividend was $0.70 per share. The special dividend, however, is variable and can go all the way down to zero if oil prices plunge.
Source Fool.com
