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Shell (SHEL)
Headquartered in London, Shell is a multinational energy giant with operations in more than 70 countries. It produces around 3.2 million 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.
The company’s NYSE-listed shares are up 13.6 per cent year to date.
Piper Sandler analyst Ryan Todd sees an opportunity in the oil and gas supermajor. Last month, the analyst reiterated an ‘overweight’ rating on Shell while raising his price target from $75 to $80.
Considering that Shell trades at around $50.50 per share today, Todd’s new price target implies a potential upside of 58 per cent.
Chevron (CVX)
Chevron is another oil and gas supermajor that’s benefiting from the commodity boom.
For Q2, the company reported earnings of $11.6 billion, which more than tripled the $3.1 billion in the same period last year. Sales and other operating revenues totaled $65 billion for the quarter, up 81 per cent year-over-year.
In January, Chevron’s board approved a 6 per cent increase to the quarterly dividend rate to $1.42 per share. That gives the company an annual dividend yield of 3.6 per cent.
The stock has enjoyed a nice rally too, climbing 32 per cent in 2022.
Morgan Stanley analyst Devin McDermott has an ‘equal weight’ rating on Chevron (not the most bullish rating) but raised the price target from $187 to $193 last month. That implies a potential upside of 23 per cent from the current levels.
Exxon Mobil (XOM)
Commanding a market cap of over $400 billion, Exxon Mobil is bigger than Shell and Chevron.
The company also boasts the strongest stock price performance among the three in 2022 — Exxon shares are up 55 per cent year to date.
It’s not hard to see why investors like the stock: the oil-producing giant gushes profits and cash flow in this commodity price environment. In the first six months of 2022, Exxon earned $23.3 billion in profits, a huge increase from the $7.4 billion in the year-ago period. Free cash flow totalled $27.7 billion for the first half, compared to $13.8 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 3.6 per cent.
Wells Fargo analyst Roger Read has an ‘overweight’ rating on Exxon and a price target of $109 — around 10 per cent above where the stock sits today.
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 per cent 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.
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.
