The Energy Sector Has It All Energy companies come in all sizes, from megacaps like Exxon Mobil (NYSE: XOM), which has a market cap around half a trillion dollars, to $7 million market cap Enservco (NYSE: ENSV), a Colorado-based company that provides oil well services. There are many blue chip and quality companies, like Exxon Mobil and the other oil majors, for long-term and/or conservative investors. For those who want to be paid a strong dividend every quarter, there are lots of master limited partnerships, like Sunoco LP (NYSE: SUN), which yields about 6%. Investors interested in renewable energy can look at, among others, Hannon Armstrong Sustainable Infrastructure Capital (NYSE: HASI), a firm that invests in solar, wind, and other projects and sports a yield above 5%. For speculators, there is a wide variety of choices. There are lots of low-priced energy stocks that trade for under $10, like Vaalco Energy (NYSE: EGY) and Uranium Energy (NYSE: UEC). And, of course, there's one of the favorite tools of traders: call options. A call enables you to control 100 shares of stock while greatly lowering the amount of capital you have at risk. (You can find many for less than $5.) For example, let's say you were interested in oil giant BP (NYSE: BP), formerly known as British Petroleum. The $110 billion market cap stock trades for around $40, so if you bought 100 shares, it would cost you around $4,000. If you thought BP was going to go on a run over the next several months, you could buy the June 2025 $40 calls for $1.35, which would cost you only $135 to control the same 100 shares. If the trade didn't work out, the most you could lose would be $135. But if BP rose to just $45, your return would be well into the double digits in less than a year. And if the stock climbed to $50, you'd be up over 100%. The energy sector offers something for every investor. So with apologies to Paul Simon, here's my "50 Ways to Invest in the Energy Sector"... - Pick up a stock low, Joe.
- Grab a blue chip, Skip.
- Buy a cheap call, Saul.
Incorporate one or more of these strategies, and you may "just get yourself [financially] free." Good investing, Marc P.S. Should we make it 51? Here's a bonus... Click the button below, Bo... |
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