Oil Prices Are Soaring. These 3 Energy Stocks Are the Ones to Buy in April.
Crude prices have skyrocketed this year due to the war with Iran. Brent, the global oil benchmark, has soared more than 60% to around $100 a barrel. Meanwhile, WTI, the primary U.S. oil benchmark, has rocketed 65% to about $95 a barrel. Despite the current ceasefire and peace talks, oil prices could remain elevated for a while since it could be quite some time before the market returns to normal. With that in mind, here are three top energy stocks to buy this month to capitalize on the current market conditions. Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue » Image source: Getty Images. Chevron Few energy companies were in a better position to cash in on this year’s surge in crude prices than Chevron (NYSE: CVX). The oil giant completed several major capital projects last year and closed its acquisition of Hess. As a result, Chevron initially expected to produce an additional $12.5 billion of free cash flow this year at $70 oil. It’s now on track to reap an even bigger windfall, given where crude prices are these days. Chevron will return much of this windfall to shareholders. The oil company will likely repurchase shares at the high end of its $10 billion to $20 billion target range. It repurchased $12.1 billion of shares last year and bought $2.2 billion of Hess stock before the merger closed. Chevron has already increased its dividend (current yield of 3.8%), extending its growth streak to 39 consecutive years. Meanwhile, Chevron is in a strong position to continue growing briskly even if oil prices cool off. It expects to grow its free cash flow at a more than 10% compound annual rate through 2030, assuming oil averages $70 a barrel. With its share price up only about 20% this year, Chevron could have a lot more upside, especially if crude prices remain elevated. Energy Transfer Energy Transfer (NYSE: ET) is a leading pipeline company. The master limited partnership (MLP) — an entity that sends a Schedule K-1 Federal tax form — operates crucial midstream infrastructure to support the flow of oil and gas. While it has minimal direct exposure to commodity prices (90% of its earnings come from fees), it benefits from higher volumes. Energy Transfer’s terminals are crucial to supporting the U.S. Strategic Petroleum Reserve. The U.S. is tapping into that emergency stockpile this year to help offset some of the disruption caused by the war with Iran. That should benefit Energy Transfer as oil flows out of the SPR and again when the country refills its reserve.