Oil and gas stocks represent such a significant portion of the energy sector that they are typically considered apart from other types of energy companies. Because oil exploration, production and distribution companies see their fortunes closely linked with the price of crude oil, it frequently makes more sense to consider these companies on their own in this fashion. As we explore the top performing oil stocks below, we'll look at companies with a broad set of interests and goals within this massive industry.
The Organization of Petroleum Exporting Countries (OPEC) is likely the single largest determining factor when it comes to the oil market. Collectively, the 14 countries comprising this group can coordinate their efforts to move oil prices one way or another. Because OPEC and other nations curtailed production in late 2017 and into 2018, the price of oil was relatively stable to begin 2018. Over the course of the year, oil prices jumped to a peak of nearly $87 per barrel in October. However, crude prices tumbled significantly in the last few weeks of the year, sending many oil stocks falling and putting oil producing nations in a difficult position of having to carefully control supplies, lest prices continue to plunge.
Here is a look at the top performing individual oil companies with market caps of at least $10 billion from December 2018. The list here is presented in order of monthly performance based on the opening stock price, as of December 3, 2018, and closing price as of December 31, 2018. The performance has been compared to the S&P Global Oil Index average returns for the same period of -12.16%.
1. Sasol Limited (SSL)
- Market Cap: $19.74 billion
- Performance: -0.64%
2. Eni S.p.A. (E)
- Market Cap: $59.96 billion
- Performance: -4.80%
3. Royal Dutch Shell (RDS-A)
- Market Cap: $245.75 billion
- Performance: -5.96%
4. Enbridge Inc. (ENB)
- Market Cap: $62.15 billion
- Performance: -6.52%
5. Total S.A. (TOT)
- Market Cap: $142.58 billion
- Performance: -7.18%
South African integrated energy and chemical corporation Sasol Limited outperformed its similarly sized competitors in the oil industry for the month of December. Sasol is divided into operating business units which oversee exploration and production of oil and gas, among many other projects as well. Although the company is headquartered in South Africa, it has operations in 32 countries around the world. Utilizing proprietary chemical production techniques, Sasol is able to develop an incredibly wide range of oil- and gas-based products.
In spite of dramatic losses across the oil industry in the month of December, Sasol managed to nearly break even. The company has been able to increase its volume of production at multiple key facilities, and it remains focused on crucial projects including the development of a new plant in Louisiana which may triple U.S. production for Sasol. The company is aiming for an improvement on ROIC of at least 2% over 2017.
Eni is one of the largest industrial companies in the world. Headquartered in Rome, Eni operates in more than 70 countries. This company is involved in every aspect of the oil industry, from exploration and surveying to on- and offshore drilling, and later refining and distribution.
Since 2014, Eni has undergone a dramatic transformation of its large-scale business practices. In 2017, for instance, adjusted operating profit more than doubled as compared with 2016, while net capital expenditures decreased by 18%. More recently, the company has reached agreements with Oman's Ministry of Oil and Gas and the Abu Dhabi National Oil Company to continue to expand its operations in the Middle East. However, the company has also made headlines for its involvement in a lawsuit regarding its involvement in potentially unscrupulous practices in Nigeria.
Royal Dutch Shell
Shell, a Netherlands-based company, also operates in virtually every aspect of the oil industry, from exploration and surveying through to distribution. Like other major corporations on this list, Shell divides its operations across multiple channels. These include Upstream, which oversees the exploration, marketing and distribution of oil and gas, and Downstream, which oversees the refining of crude oil into a variety of different products for distribution, trade, and sale around the world.
While Shell had a difficult time when oil prices crashed, it was able to turn around its fortunes by the end of 2018. At that time, it offered investors a strong yield of more than 6%. It also initiated a $25 billion stock buyback program. Further, the company was successfully able to divest non-necessary assets throughout this fraught time, and it ended 2018 with a strong asset base. All of these things point to continued success for one of the world's most popular and recognizable oil companies. However, Shell is also involved in the lawsuit which has embroiled Eni regarding Nigeria's OPL 245 oilfield. The companies are alleged to have paid more than $1 billion in bribes to Nigerian officials.
Canadian Enbridge is an oil company focused on the generation, transportation and distribution of energy products throughout North America. Enbridge was one of the most prominent oil companies to engage in a high-profile merger over the last several years. In September of 2016, the company bought Spectra Energy in an all-stock deal worth about $28 billion. In Canada, Enbridge is the largest transporter of crude oil, moving roughly 2.2 million barrels per day.
In December, Enbridge announced its 24th consecutive annual quarterly dividend increase, boosting dividend payouts by 10%. For Q3 of 2018, Enbridge's adjusted earnings climbed by roughly 50% year-over-year to $933 million. Adjusted EBITDA also rose year-over-year, alongside distributable cash flow. At the same time, Enbridge brought roughly $7 billion worth of new projects into service throughout 2018. With Q4 results set to be made public in February, time will tell if the company can sustain this momentum.
Like the other super-players on this list, Total's operations cover the entirety of the oil industry. This French company is almost 100 years old and, since late 2016, has divided its business into six major operations branches.
Total has pledged that 2019 will mark its largest exploration campaign in many years, with a shift in focus from riskier areas to more established sites producing oil and natural gas. This expansion will involve the drilling of nearly two dozen new sites around the world. The company saw total revenues for Q3 of 2018 of $48.40 billion, an increase of 30% year-over-year. At the same time, the company reported earnings diluted of $1.47 per share for the same period.
In light of the dramatic drop in oil prices late in 2018, OPEC and other oil-producing nations pledged to reduce total output to 1.2 million BPD beginning in January. Even still, though, the oil market may remain oversupplied throughout much of 2019. With geopolitical events taking place across many oil-rich nations, including Venezuela, Nigeria and the Middle East, it's difficult to tell how external events will impact the oil market and, in turn, oil company stock prices.