4 Integrated Energy Stocks to Benefit From Industry Tailwinds

Yahoo Finance ·

4 Integrated Energy Stocks to Benefit From Industry Tailwinds Nilanjan Banerjee Tue, September 22, 2026 at 12:06 PM EDT 5 min read CL=F CVX BP NG=F XOM The crude pricing environment is highly promising for the integrated energy company's exploration and production operations. The integrated players also have a stable midstream business that generates cashflows during all the business cycles, thereby making the prospects of the Zacks Oil and Gas Integrated International industry encouraging. Due to their integrated business model, ExxonMobil Holdings Corporation XOM, Chevron Corporation CVX, BP plc BP and Eni SpA E are well-positioned to make the most of the promising business environment. The Zacks Oil and Gas Integrated International industry covers companies primarily involved in upstream, midstream and downstream operations. These companies have upstream businesses in the United States (including prolific shale plays and the deepwater Gulf of Mexico), Asia, South America, Africa, Australia and Europe. Midstream operations of energy companies entail transporting oil, natural gas liquids and refined petroleum products. In downstream businesses, the firms buy raw crude to produce refined petroleum products. The companies' downstream activities involve chemical businesses that manufacture raw materials for making plastics. The integrated players are now gradually focusing on renewables, leading to the energy transition. The firms aim to lower emissions from operations and cut the carbon intensity of the products sold. 3 Trends Shaping the Future of the Industry Favorable Oil Prices to Aid Cash Flows: West Texas Intermediate ("WTI") crude is hovering around the $90 per barrel mark. The oil price is significantly higher than the break-even prices of key resources in the United States, which is still promising for the exploration and production business of integrated players in the industry. Sturdy Midstream Demand: With the possibility of upstream activities remaining advantageous, thanks to handsome commodity prices, oil and gas production is expected to stay healthy. This will likely boost the demand for pipeline and storage assets since more commodities will need to be transported and stored. Importantly, the midstream business has lower exposure to commodity price volatility since shippers generally book pipeline assets for the long term, thereby generating stable fee-based revenues. Business Diversification: International integrated energy companies are gradually investing in the renewable business. Thus, by diversifying operations, companies will be able to capitalize on the mounting demand for cleaner energy. Zacks Industry Rank Indicates Bullish Prospects The Zacks Oil and Gas Integrated International industry is part of the broader Zacks Oil - Energy sector. The industry carries a Zacks Industry Rank #77, which places it in the top 31% of more than 250 Zacks industries. The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Before we present a few stocks that you may want to bet on or keep an eye on, let's take a look at the industry's recent stock market performance and valuation picture. Industry Outperforms the S&P 500 & Sector The Zacks Oil and Gas Integrated International industry has outperformed the Zacks S&P 500 composite and the broader Zacks Oil - Energy sector over the past year. The industry has rallied 43.3% over this period compared with the S&P 500's surge of 15.8% and the broader sector's improvement of 31.6%. Since oil and gas companies are debt-laden, it makes sense to value them based on the Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) ratio. This is because the valuation metric takes not just equity into account but also the level of debt. On the basis of the trailing 12-month EV/EBITDA, the industry is currently trading at 5.88X, lower than the S&P 500's 17.76X. It is also below the sector's trailing 12-month EV/EBITDA of 5.97X. Over the past five years, the industry has traded as high as 7.43X and as low as 2.71X, with a median of 4.21X. 4 Integrated International Stocks to Gain Eni expects its oil and gas production to grow about 4% annually through 2030, driven by new projects across Asia, Latin America and Africa. The company also has more projects lined up that can support growth beyond 2030. Eni currently sports a Zacks Rank #1 (Strong Buy). BP is an integrated energy giant and is well-positioned to capitalize on oil prices, which are still promising, through its upstream operations. Increasing global demand for LNG will continue to support natural gas. Therefore, BP, currently carrying a Zacks Rank #3 (Hold), is well-positioned to benefit from the rising demand for clean energy. You can see the complete list of today's Zacks #1 Rank stocks here . With upstream businesses contributing the most to its earnings, ExxonMobil 's business outlook seems promising, thanks to handsome oil prices. Investors should also keep in mind that #3 Ranked XOM, has a strong balance sheet, on which it could rely during an unfavorable business environment. The debt to capitalization of ExxonMobil is at 13.73%, lower than the 36.4% of the industry's composite stocks. Coming to the integrated energy giant's dividend commitment story, over the past 43 years, ExxonMobil has been rewarding its shareholders with annual dividend hikes at an average rate of 5.8%. Chevron is an integrated energy giant with a stable business model. In the Permian, the most prolific basin in the United States, CVX, with a Zacks Rank of 3, has a strong footprint. Also, the company has a strong balance sheet with significantly lower debt capital exposure than the industry's composite stocks. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BP p.l.c. (BP) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report ExxonMobil Holdings Corporation (XOM) : Free Stock Analysis Report Eni SpA (E) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com).

DYAX Investor Sentiment

Bullish (Long) 49% · Bearish (Short) 51%

359 participants

Related News

원문 보기 — Yahoo Finance