Crude oil or petroleum companies have some of the best oil stocks to invest in 2012, as a result of some favorable market conditions.
Before we glance at some of the best oil stocks for 2012, it is necessary to get a better review of the entire crude oil and petroleum market across the world. After all, this is the market that affects the stock prices of crude oil companies and refineries, besides impacting all other industrial sectors around the world. Crude oil sector, from the point of view of stock investing is well, ‘not-very-nice’. The prominent reason for making such a remark is that firstly, all the oil stocks are costly and you need good capital to buy a reasonable amount of shares. Secondly, even the best oil stocks can be very dynamic in the short run. It means that you invest in a large sum that tends to have a volatile price in the short run, that is a time period of about 12 months. However in the long run, that is, a time period exceeding 12 months, this very stock category will show a steeply rising market price. Overall, oil stocks are super profitable. However, due to the short term dynamic nature, it proves to be a dangerous stock if you do not keep a keen eye on it.
The Crude Oil Market Today
Several experts have commented upon the best oil stocks for 2012 and the current status of the petroleum market. The best way to invest in oil is through the common stock. It is a known fact that oil reserves of the world are fast drying up. In contrast to that, the total demand is quickly becoming more and more aggressive. One of the biggest sphere, that has substantially boosted oil demand is fast developing South-East Asia. Now why is the crude oil share stock connoted to be the best investment for 2012? Simple enough. We know that oil is becoming scarce and there are lesser avenues to get it. Yet the world demand is high. This caused the price of oil to shoot up sky-high, way over $140, almost touching $150. Currently the prices have eased out, around $100 per barrel, but they are expected to rise to about $115 per barrel in 2012.
The total revenue obtained by the oil companies is thus, going to escalate way beyond the normal range. And here’s the catch, the operational cost is going to remain unchanged and the raw material acquisition cost is going to rise, but not steeply. This points out to two things, a better dividend and high yield in oil company stocks. Both these factors are due to better revenue and a better market price of the stocks. Investing in established oil companies is the best strategy.
Best Oil Stocks to Invest in 2012
There are several companies which are considered to have the top oil stocks. While choosing the best oil stocks to buy, you can ask the following questions to ascertain whether a said stock is the right purchase or not.
- What is the revenue of the company and how much are the units sold?
- What is the source of raw material and what is the source of revenue?
- What is the size and reputation of the company?
- How is the dividend issue policy?
- What are the recent acquisitions, collaborations and sell-offs made by the company?
- What is the P/E ratio, earnings per share (EPS), dividend and yield percentage?
These facts will give you a pretty good overview of the company. Apart from that, there are also several pointers and guidelines that can be used, such as the annual reports of the companies, comments by the experts, stock exchange trends, etc. Remember, all the possible pointers towards good stocks are of importance.
|Company/ Oil stocks||Notes and Pointers|
|Exxon Mobil Corp||A direct descendant of the Standard Oil company founded by John.D.Rockfeller, Exxon Mobil Corp. is one of the top six oil majors of the world, with a record largest corporate quarterly earnings delivered over many years. Exxon Mobil produces about 3% of the world oil and is one of the topmost oil stocks.|
|Chevron Corporation||Fascinating revenue and net income, the company is bound to be the first among the best investments in oil companies. Chevron is also predicted to give the best dividend for this year. This company also ranks among the 6 major oil companies of the world.|
|Occidental Petroleum||Mammoth, is the only and the most apt word to describe ‘Oxy’. The company has a huge market cap and has gigantic operation in the middle east, North Africa and South America. Overall, the source of oil and sales are both assured and since the company deals in oil, natural gas and petrochemicals, the revenue as well as the profit is always positive. The result, a very good graph for stock rates and an excellent dividend.|
These companies are just a few pointers to the best oil stocks for 2012. Here’s list of oil stocks which you can study.
- Chesapeake Energy Corp
- SandRidge Energy Inc.
- RAM Energy Resources Inc.
- Hess Corporation
- Marathon Oil
- Apache Corporation
- Anadarko Petroleum Corporation
There are several avenues that you can tap, if you want to invest in oil stocks. Though the aforementioned are the best stocks, you need to analyze the company in which you are planning to invest in before buying oil stocks, as there is always a probability of loss. Maintain the decorum of careful analysis and also maintain the policy of buying low and selling at high prices. The oil stocks for the upcoming 5 years are going to show a great projection. However, they might turn volatile and might even show a downward stock projection after that. Be extremely careful while investing in any stock during 2012, as the financial atmosphere is highly mercurial.