Shell (SHEL)

Let’s start with Shell — the company so attractive that even ESG funds couldn’t say no to.

Headquartered in London, Shell is a multinational energy giant with operations in more than 70 countries. It produces around 3.2 barrels of oil equivalent per day, has an interest in 10 refineries, and sold 64.2 million tons of liquefied natural gas last year.

It’s a staple for global investors, too. Shell is listed on the London Stock Exchange, Euronext Amsterdam, and the New York Stock Exchange.

Energy stocks have pulled back over the past month and Shell was caught in the sell-off as well. However, its NYSE-listed shares are still up 9.4% year to date.

Piper Sandler analyst Ryan Todd sees opportunity in the company. On Tuesday, the analyst reiterated an ‘overweight’ rating on Shell while raising his price target from $69 to $75.

Considering that Shell trades at around $49 per share today, Todd’s new price target implies a potential upside of 53%.

Join Masterworks to invest in works by Banksy, Picasso, Kaws, and more. Use our special link to skip the waitlist and join an exclusive community of art investors.

Skip waitlist

Chevron (CVX)

Chevron is another oil and gas supermajor that’s benefiting from the commodity boom.

For Q1, the company reported earnings of $6.3 billion, which more than quadrupled the $1.4 billion in the same period last year. Revenue totaled $54.4 billion for the quarter, up 70% year over year.

In January, Chevron’s board approved a 6% increase to the quarterly dividend rate to $1.42 per share. That gives the company an annual dividend yield of 3.9%.

The stock has enjoyed a nice rally too, climbing 22% in 2022.

HSBC analyst Gordon Gray expects the fun to continue. The analyst recently upgraded Chevron from ‘hold’ to ‘buy’ and set a price target of $167 — roughly 15% above where the stock sits today.

Exxon Mobil (XOM)

Commanding a market cap of nearly $370 billion, Exxon Mobil is bigger than Shell and Chevron.

The company also boasts the strongest stock price performance among the trio in 2022 — Exxon shares are up 38% year to date.

It’s not hard to see why investors like the stock: the oil-producing giant gushes profits and cash flow. In Q1, Exxon earned $5.5 billion in profits, a huge increase from the $2.7 billion in the year-ago period. Free cash flow totaled $10.8 billion for the quarter, compared to $6.9 billion in the same period last year.

Solid financials allow the company to return cash to investors. Exxon pays quarterly dividends of 88 cents per share, translating to an annual yield of 4.0%. Management has also increased the company’s share repurchase program to up to $30 billion through 2023.

Bank of America analyst Doug Leggate has a ‘buy’ rating on Exxon and a price target of $120. That implies a potential upside of 37% from the current levels.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

What to Read Next

Disclaimer

The content provided on MoneyWise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.