These oil companies could be the next takeover targets in Permian Basin after Diamondback deal

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2024 energy outlook: What investors can expect from crude prices, and how to play it

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What tie-ups in the U.S. oil patch could mean for players like Coterra Energy

Permian Basin rigs in 2020, when U.S. crude oil production dropped by 3 million a day as Wall Street pressure forced cuts.

Paul Ratje | Afp | Getty Images

Exxon Mobil‘s (XOM) planned deal to buy Pioneer Natural Resources (PXD) has sparked talk of more consolidation in the oil-and-gas industry. While we don’t own companies as mergers-and-acquisition plays, the potential for more tie-ups could have significant implications for our remaining oil name: Coterra Energy (CTRA).

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Top Wall Street analysts pick these dividend stocks for solid returns

Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

When times get rocky for the stock market, dividends can offer investors a measure of stability in the form of portfolio income.

Here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.


Energy giant Chevron‘s (CVX) earnings declined in the second quarter of 2023, as energy prices have cooled down compared to last year when the Russia-Ukraine conflict sent oil and gas prices soaring.

Nonetheless, Goldman Sachs analyst Neil Mehta recently upgraded Chevron to buy from hold, citing leading capital returns and inflection in free cash flow next year. He raised his price target for CVX stock to $187 from $166.

Mehta stated that Chevron lagged its key rivals over the past two to three years due to issues related to upstream execution and lower refining exposure compared to Exxon. However, the analyst said that some of the upstream execution risks have been addressed, with major projects in Tengiz at 98% completion and Permian volumes growing better than anticipated in Q2 2023.

Regarding capital returns, Mehta noted that Chevron has grown its dividends for more than 25 years. The stock has a yield of 3.3%. Moreover, earlier this year, the company increased its annual share repurchase guidance range to $10 billion to $20 billion from $5 billion to $15 billion.

“We highlight that from 2024-2026, we expect a sharp improvement in ROCE [return on capital employed], production per share growth and FCF per share, all enabling a top decile return of capital profile in the S&P 100,” said the analyst.

Mehta ranks 262nd among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 66% of the time, with each rating delivering an average return of 12.3%. (See Chevron Stock Chart on TipRanks)  


Mehta is also bullish on another dividend-paying energy stock – ConocoPhillips (COP). While the company’s second-quarter earnings and cash flow fell slightly short of the analyst’s expectations, he sees the possibility of a more constructive setup in the second half of 2023 as pricing realizations normalize and volumes increase.

Mehta added that though ConocoPhillips is in a higher spending mode to support longer-term and high-return projects, he continues to expect attractive capital returns in 2024 and beyond. The analyst projects a capital return yield of 7% in 2024, with room for further upside.

The analyst’s 2024 capital return projection is based on $5 billion of share buybacks and the expectation of a higher dividend payout of $4.3 billion compared to the prior estimate of $3.7 billion. ConocoPhillips has a capital return target of $11 billion for 2023, and it has returned about $5.8 billion to shareholders in the first half of the year through share repurchases and fixed and variable dividends.

Mehta reiterated a buy rating on COP and raised the price target to $128 from $120, saying, “We see COP as the most advantaged on return on capital employed, with a 2024-2026 avg ROCE of 21% vs the US Major peer avg of 16%.” (See ConocoPhillips’ Financial Statements on TipRanks) 

Pioneer Natural Resources

Next on this week’s list is Pioneer Natural (PXD), an independent oil and gas exploration and production company. Recently, PXD modified its capital return framework to pay at least 75% of free cash flow to shareholders through base and variable dividends and opportunistic share repurchases. The remaining 25% will be used to strengthen the balance sheet.

Mizuho analyst Nitin Kumar noted that in the second quarter — marking the inaugural quarter for the updated capital return framework — post-base dividend free cash flow was evenly divided between buybacks (about $125 million) and variable dividends ($138 million). He also mentioned that Pioneer recently announced its third-quarter dividend payment and pointed out that its forward dividend yield is over 3.0%, based on $1.25 per share of base dividend and $0.59 per share of variable dividend.  

Kumar, who has a buy rating on PXD with a price target of $265, highlighted that PXD’s second-quarter volumes and above-guidance production validated his prediction of an improvement in well productivity, as indicated by his firm’s proprietary database.    

“Critically, this well productivity is allowing management to increase oil/total production guidance by ~1%/3% while reducing capex by ~3%, setting the stage for strong capital efficiencies into 2024 without factoring in the impact of cost deflation anticipated by the industry,” said Kumar.

Kumar holds the 26th position among more than 8,500 analysts on TipRanks. Moreover, 79% of his ratings have been profitable, with each generating a return of 23.2%. (See PXD Insider Trading Activity on TipRanks)

Seagate Technology

Seagate (STX), one of the prominent makers of computer hard drives, is under pressure because of the uneven pace of recovery in China and cautious enterprise spending due to macro headwinds.

Nevertheless, Baird analyst Tristan Gerra, who ranks 398th among more than 8,500 analysts tracked on TipRanks, remains bullish on this dividend-paying tech stock. Seagate generated free cash flow of $626 million in fiscal 2023 and paid $582 million in dividends while directing $408 million toward repurchasing shares. STX offers a dividend yield of 4.2%.

The analyst noted that the June quarter’s shipments fell significantly due to the ongoing inventory correction among most of the company’s customers, with this trend expected to last a couple of additional quarters. However, the analyst contended that hard disk drive (HDD) secular demand trends remain intact.  

Gerra thinks that the worst is behind the company. He expects STX’s gross margin to improve due to the company’s aggressive cost reduction and ramp-up of higher-density architecture.

The analyst reiterated a buy rating on STX stock with a price target of $70. He said, “Net, business remains structurally sound, and we see no reason for Seagate not to return and eventually exceed a historical $5-$5.50 EPS run rate.”

Gerra has a success rate of 56% and each of his ratings has returned 10.3% on average. (See Seagate Hedge Fund Trading Activity on TipRanks)          


Last on this week’s list, there’s fast-food chain McDonald’s (MCD), which impressed investors with strong second-quarter results. The company is a dividend aristocrat and has raised its dividend payment for 46 consecutive years. MCD has a dividend yield of 2.1%. 

Following the impressive Q2 2023 print, RBC Capital analyst Christopher Carril reiterated a buy rating on MCD and increased the price target to $340 from $325.

The analyst highlighted that the company delivered another solid quarter against elevated estimates, driven by still-elevated average check and positive guest counts, which were supported by its robust marketing efforts. 

“McDonald’s stable and improved business model, global scale and near best-in class dividend yield all help to balance relatively lower unit growth, in our view justifying a multiple above that of all franchised peers,” said Carril.

Carril ranks No. 661 out of more than 8,500 analysts tracked on TipRanks. Also, 64% percent of his ratings have been profitable, with an average return of 12.3%. (See McDonald’s Blogger Opinions & Sentiment on TipRanks)  

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State leaders targeting climate investing have quiet stakes in the fossil fuel industry

In October, Scott Fitzpatrick, then-treasurer of Missouri, announced his state would pull $500 million out of pension funds managed by BlackRock.

He said he would move Missouri’s money away from the asset manager because it was “prioritizing” environmental, social and governance investing over shareholder returns. Fitzpatrick, a Republican who won election as the state’s auditor in November, used his office as treasurer to target BlackRock after years of criticizing Wall Street for a perceived turn toward investing focused on climate and social issues.

As he homed in on BlackRock, Fitzpatrick quietly held a financial stake in a massive fossil fuel company that could suffer from the broader adoption of alternative energy. Fitzpatrick and his wife owned a more than $10,000 stake in Chevron during both of 2022 and 2021, according to his latest financial disclosures filed with the state.

Fitzpatrick is among a group of powerful Republican state leaders who have waged similar fights against environmentally conscious investing as they held personal investments in, or saw political support from, the fossil fuel industry.

A handful of state financial officers who have similarly attacked ESG practices owned stock or bonds in oil, gas or other fossil fuel companies in recent years, according to the latest state financial disclosure reports reviewed by CNBC. Some of the state officials have received campaign donations from fossil fuel companies or their executives.

Climate activists with Stop the Money Pipeline hold a rally in New York City to urge companies to end their support for the proposed Line 3 pipeline project and stop funding fossil fuels and forest destruction, April 17, 2021.

Erik McGregor | LightRocket | Getty Images

State leaders face possible conflicts of interest when they have a chance to see financial gains from the fossil fuel industry as they use their offices to defend the sector — or in some cases move their state’s dollars away from clean-energy investments, government ethics experts told CNBC. As the officials ramp up their criticism of Wall Street investment practices, a lack of state laws requiring regular stock disclosures makes it difficult for the public to monitor what personal stake their representatives could have in the actions they take in office.

Brandon Alexander, the chief of staff to the Missouri auditor’s office, told CNBC in an emailed statement that Fitzpatrick’s publicly traded securities are either in a trust or qualified retirement accounts that are managed by a financial advisor.

“Other than employer sponsored retirement accounts (the entirety of which are invested in target date funds over which he has no control), all of Auditor Fitzpatrick’s publicly traded securities, are held in a trust or in qualified retirement accounts which are actively managed by a financial advisor to whom he gives no direction,” Alexander said. “He has never ‘had private briefings tied back to the fossil fuel industry’ nor does he personally direct or execute trades himself. Auditor Fitzpatrick stands by his criticism of the ESG movement, especially as it relates to the application of ESG standards in the management of public funds.”

Unlike members of Congress, state financial officers in many cases only have to disclose their stock ownership once a year. In some states, they do not have to divulge their investments at all. In contrast with federal lawmakers, they also do not have to file regular records disclosing their new trades.

None of the officials mentioned in this story engaged in illegal conduct. But the fact that they have investments that could be helped by their high-profile campaigns against ESG investing may create trust issues with the people they represent, says ethics experts.

“This is a problem that we have elected officials at the federal and state level that are simply not willing to avoid personal financial conflicts of interest,” Richard Painter, who was the chief White House ethics lawyer in the George W. Bush administration, told CNBC in an interview. “You could have someone own stock in a company and pursue policy that could benefit that company. What’s good for Exxon Mobil’s stock is not necessarily good for America.”

Painter said that owning such stock is not illegal for state based leaders. Congressional lawmakers are also allowed to own stock but the 2012 STOCK Act disallows members of Congress to use non-public information to gain a profit and prohibits insider trading.

Another government ethics expert also cited an appearance of conflict as an issue for public officials.

“If an official has a financial interest in a company or an industry, it is reasonable to question whether that interest impacts how they approach their government work,” Donald Sherman, a senior vice president and chief counsel for watchdog group Citizens for Responsibility and Ethics in Washington, told CNBC in an interview.

The fight against ESG investment standards has become a core issue for some Republicans at the federal and state level. Many of those officials have used their positions to target companies they believe are too politically active or, in some cases, are hurting certain industries, such as fossil fuels.

In the case of state financial officers, they have the power to shift public assets or pension funds away from certain firms and to other institutions.

Vocal ESG critics have fossil fuel ties

Georgia’s state treasurer, Steve McCoy, was appointed by Republican Gov. Brian Kemp in 2020. He was among state financial officers, including Fitzpatrick in Missouri, who last year co-signed a letter to President Joe Biden opposing policies that promote ESG. The Biden administration has promoted environmentally conscious investing, and the president used his first veto on a measure that would have shot down a Labor Department rule that promoted ESG policies.

The letter said the state officials “believe the White House should be spearheading a call to invest in American energy instead of pursuing ESG initiatives that divide American energy businesses and discourage investment in these reliable energy industries.” The group went on to say that “freedom is the key to addressing climate change. The depth and breadth of American innovation is unparalleled globally, including the development of green technologies. However, oil, gas, coal, and nuclear are currently the most reliable and plentiful baseload power sources for America and much of the rest of the world.”

McCoy is one of the state financial officers who held an investment in fossil fuels. He had a stake in the industry as recently as 2020 — though changes in disclosure rules mean he has not had to disclose his assets more recently.

McCoy disclosed in 2020 that he owns bonds in fracking company Halliburton and a stake in the U.S. Oil Fund, an ETF that tracks the benchmark price of U.S. crude oil. The disclosure says that these stakes are either “more than 5 percent of the total interests in such business or investment, or [have] a net fair market value of more than $5,000.”

The 2020 disclosure was the last time McCoy filed a document showing his investments. Some states, including Georgia, do not require officials who hold key state positions to file full disclosure forms, and require those leaders to publish only a one-page affidavit, according to Haley Barrett, a spokeswoman for Georgia’s Government Transparency and Campaign Finance Commission.

Two of McCoy’s affidavits filed with the state say virtually nothing about his business dealings and stock holdings. McCoy’s most recent affidavit, from 2022, shows his titles as treasurer and as a member of a variety of boards, including the state Depository Board.

McCoy also had to sign a statement to confirm that he has taken “I have taken no official action as a public officer in the previous calendar year which had a material effect on my private, financial or business interests.” That affidavit and a 2021 version of the document does not say whether McCoy currently owns any stocks in the fossil fuel industry.

When asked about what the state ethics commission does to verify if those signed statements are accurate, Barrett said in an email that “once these documents have been filed with our office and reviewed, there is an opportunity to determine if there are any discrepancies in the filings. Investigations can be initiated internally through our office or by a third party complaint.”

McCoy and his office did not return requests for comment.

McCoy is far from the only ESG critic who has a financial or political interest in fossil fuel companies.

Texas’ state comptroller, Glenn Hegar, argued in letters to money managers last year that he believes firms such as BlackRock, HSBC and UBS are boycotting the energy industry, saying in a statement at the time that he believes “environmental crusaders” have created a “false narrative” that the economy can transition away from fossil fuels. Hegar co-signed an open letter in 2021 with other state financial officers that was addressed to the U.S. banking industry and defended the fossil fuel industry.

“We will each take concrete steps within our respective authority to select financial institutions that support a free market and are not engaged in harmful fossil fuel industry boycotts for our states’ financial services contracts,” the letter reads.

He also co-signed the 2022 letter to Biden from a slate of other state financial officers defending the fossil fuel industry.

Hegar has since escalated his campaign against the institutions. Hegar sent letters to fellow state money managers arguing that they have not done enough to cut ties with BlackRock and other firms that he said boycotted the oil and gas industry, Bloomberg reported in February.

In the lead-up to his anti-ESG push, Hegar owned stock in the oil and gas industry. In 2021, the Texas comptroller and his spouse owned between 100 and 499 shares of Devon Energy and up to 99 shares of ConocoPhillips, according to his latest financial disclosure.

His financial records from all of the previous years since he became state comptroller in 2015 do not show any stock in these two companies or in the fossil fuel industry at large.

Hegar’s political ambitions have also seen a boost from the oil and gas industry — a dominating force in Texas. During his 2022 reelection, Hegar received donations from a range of PACs and executives from the oil and gas business.

His campaign received $10,000 last year from Ben “Bud” Brigham, the chairman of oil and gas development company Brigham Exploration, according to state campaign finance records. The PACs of Chevron, ConocoPhillips, Devon Energy, Calpine Corp. and Valero Energy were among Hegar’s fossil fuel donors during his run for reelection last year, according to state records.

Hegar and his office did not return requests for comment.

Jimmy Patronis, Florida’s chief financial officer, has been railing against ESG investment standards since around the time he was reelected to the position in November. Patronis was also among the co-signers of the 2022 letter to Biden defending the fossil fuel industry.

By December, Patronis announced that the Florida Treasury would start divesting $2 billion of assets managed by BlackRock. In an interview on CNBC’s “Squawk Box” in February, Patronis explained the decision.

“The bottom line: I’m seeing dollars are being siphoned off. I’m seeing individuals, like [BlackRock CEO Larry] Fink and others that are using the state of Florida’s money for a social agenda,” he said.

He added: “I just care about returns. And I’m not seeing that.”

Heading into 2022, he also had a financial interest in the fossil fuel industry.

Patronis owned 100 shares combined of Exxon Mobil and Chevron — the two largest gas companies in the world — at the end of 2021, according to his most recent publicly available disclosure.

His personal interest in fossil fuel companies has grown in recent years. In 2018, he disclosed only about 10 shares of Exxon and did not list any Chevron stock.

The document was the first time since 2018 that Patronis listed investments in the sector.

Frank Collins III, the state’s deputy chief financial officer, told CNBC in a statement that Patronis believes ESG efforts are part of a campaign to decimate the oil and gas industry. He said Patronis does not personally make trading or investment decisions for the state’s retirement systems.

“The CFO wants great returns for those in Florida’s retirement funds, nothing else. While the ESG movement has been on a campaign to erase America’s oil and gas industry from the map, those industries were making returns for investors,” Collins said.

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