More: Is buying a Tesla worth it?
Cost and charger conundrum
Roughly 80% of Americans name “costs” and the “availability of charging stations” as their EV biggest concerns. There are only 53,000 electric charging stations in the U.S. compared to 145,000 gas stations, according to the World Economic Forum. Charging an EV is substantially more time consuming, which explains why charging stations need to exceed gas stations for comparable availability.
Reliability ranks as another key issue. Drivers seldom have to worry about their local gas station being out of service – but one-fourth of charging stations tested by climate advocacy group Cool the Earth didn’t function.
Resolving these issues could take years, which means the Biden Administration’s target of 67% EV adoption is likely unrealistic. It also means gas-powered vehicles and fossil fuels are here to stay for the foreseeable future. The petroleum sector is under appreciated by many investors, which could create bargain opportunities.
Here are three top oil and gas stocks to put on your radar.
Occidental Petroleum Corp.
Warren Buffett’s favorite energy stock (NYSE:OXY) is trading at a price-to-earnings ratio just below 7. Berkshire Hathaway recently purchased 4.66 million shares of the Houston-based oil producer for about $275 million. Buffett’s company has been steadily increasing its stake in Occidental Petroleum, having received regulatory approval to up its stake of the company to 50%. If it’s good enough for the Oracle of Omaha, it has to be fit for your fossil fuel watch list.
Hess Corp.
This New York-based oil and gas giant (NYSE:HES) is special because of its exposure to Guyana. The tiny South American nation discovered oil off its coast a few years ago and could be a major producer, churning out 1 million barrels a day, by 2027. Hess Corp. has a 30% stake in a massive bloc in this region, which means its production is more insulated from government regulation and environmental action than its domestic peers. The stock trades at a price-to-earnings ratio of 20.8.
Schlumberger NV
Drilling and exporting oil isn’t the only way to make money in this sector. Maintaining and servicing equipment at oil fields is just as important. The world’s largest energy equipment services corporation (NYSE:SLB) could see significant growth in demand as energy production remains elevated for the foreseeable future. This fossil fuel stock trades at an attractive P/E ratio of 19.9.
Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
