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Welcome to Episode #401 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
In April 2025, after the Liberation Day tariffs were put into place by the United States, crude oil plunged. WTI traded down to $56 a barrel and has been gyrating between $55 and $65 ever since.
While lower oil prices can mean good news for consumers at the pump, it’s bad news for the energy producers who are unhedged and have certain breakeven levels.
The oil and natural gas stocks have gotten hammered due to falling commodity prices and the uncertainty from the tariff turbulence of 2025. Although oil escaped direct American tariffs.
How Bad Was the Stock Sell-Off?
Energy companies are lumped into different categories within the oil industry. In this podcast, Tracey talks about “Big Oil” which are the large, integrated oil companies and the American explorers and producers, or the “E & Ps.”
The Integrated Oil stocks, as an industry, are down just 3.9% year-to-date. But the American E&Ps, as an industry, are now down 27.8% on the year.
The E&Ps, which do not have refining, chemicals, or other divisions to offset their production, are much more volatile when oil sells off.
Definition of a Value Versus a Trap
Just because a stock sells-off and now has a low price-to-earnings (P/E) ratio, doesn’t mean that it’s a true value in the classical sense of the word.
Remember, a true value stock is cheap on a P/E basis, but also has rising earning estimates.
Are the energy stocks cheap, or just traps?
Exxon Mobil, Chevron, and EOG Resources: Values or Traps?
Exxon Mobil is a large American integrated oil company. Shares of Exxon are down 7.1% year-to-date but have finally started sinking in the last month, falling 10.6% in that time.
Exxon appears cheap with a forward price-to-earnings (P/E) ratio of just 14.1. The 2025 Zacks Consensus Estimate is looking for $7.13 but that’s 8.5% under the $7.79 Exxon made last year. One earnings estimate has been revised higher for 2025 and 2 lower in the last week.
Exxon is a dividend all-star, with its dividend currently yielding 3.9%.
Chevron is also a large, American integrated oil company. Shares of Chevron are down 6.8% year-to-date but have been hit harder over the last month than Exxon. It’s down 14.3% during that time. But there have been dramatic one-day swings the last week.
Chevron is cheap. It has a forward P/E of 13.3. The Zacks Consensus is looking for $10.30 in 2025, which is earnings growth of 2.5% as it made $10.05 in 2024.
Chevron also pays an attractive dividend, yielding 4.8%.
EOG Resources is a large cap American exploration and production company. It produces in key basins including the Delaware Basin, Eagle Ford, and Dorado Play. EOG Resources has a strategy of returning at a minimum of 70% of annual free cash flow to shareholders.
Shares of EOG Resources have fallen 14.7% year-to-date but have really taken it on the chin in the last month, declining 16.9%. It’s cheap, with a forward P/E of 9.5. A P/E under 10 is usually considered a dirt-cheap stock.
The Zacks Consensus Estimate for 2025 is looking for $11.09. EOG Resources made $11.62 last year so that is a decline of 4.6%.
EOG Resources is currently paying a dividend yielding 3.5%.
Is EOG Resources a value or a trap in 2025?
What Else Do You Need to Know About Energy Stocks Right Now?
Tune into this week’s podcast to find out.
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Energy Stocks Take a Dive: Values or Traps?
Welcome to Episode #401 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
In April 2025, after the Liberation Day tariffs were put into place by the United States, crude oil plunged. WTI traded down to $56 a barrel and has been gyrating between $55 and $65 ever since.
While lower oil prices can mean good news for consumers at the pump, it’s bad news for the energy producers who are unhedged and have certain breakeven levels.
The oil and natural gas stocks have gotten hammered due to falling commodity prices and the uncertainty from the tariff turbulence of 2025. Although oil escaped direct American tariffs.
How Bad Was the Stock Sell-Off?
Energy companies are lumped into different categories within the oil industry. In this podcast, Tracey talks about “Big Oil” which are the large, integrated oil companies and the American explorers and producers, or the “E & Ps.”
The Integrated Oil stocks, as an industry, are down just 3.9% year-to-date. But the American E&Ps, as an industry, are now down 27.8% on the year.
The E&Ps, which do not have refining, chemicals, or other divisions to offset their production, are much more volatile when oil sells off.
Definition of a Value Versus a Trap
Just because a stock sells-off and now has a low price-to-earnings (P/E) ratio, doesn’t mean that it’s a true value in the classical sense of the word.
Remember, a true value stock is cheap on a P/E basis, but also has rising earning estimates.
Are the energy stocks cheap, or just traps?
Exxon Mobil, Chevron, and EOG Resources: Values or Traps?
1. Exxon Mobil Corp. (XOM - Free Report)
Exxon Mobil is a large American integrated oil company. Shares of Exxon are down 7.1% year-to-date but have finally started sinking in the last month, falling 10.6% in that time.
Exxon appears cheap with a forward price-to-earnings (P/E) ratio of just 14.1. The 2025 Zacks Consensus Estimate is looking for $7.13 but that’s 8.5% under the $7.79 Exxon made last year. One earnings estimate has been revised higher for 2025 and 2 lower in the last week.
Exxon is a dividend all-star, with its dividend currently yielding 3.9%.
Is Exxon Mobil a value or a trap in 2025?
2. Chevron Corp. (CVX - Free Report)
Chevron is also a large, American integrated oil company. Shares of Chevron are down 6.8% year-to-date but have been hit harder over the last month than Exxon. It’s down 14.3% during that time. But there have been dramatic one-day swings the last week.
Chevron is cheap. It has a forward P/E of 13.3. The Zacks Consensus is looking for $10.30 in 2025, which is earnings growth of 2.5% as it made $10.05 in 2024.
Chevron also pays an attractive dividend, yielding 4.8%.
Is Chevron a value after the sell-off or a trap?
3. EOG Resources, Inc. (EOG - Free Report)
EOG Resources is a large cap American exploration and production company. It produces in key basins including the Delaware Basin, Eagle Ford, and Dorado Play. EOG Resources has a strategy of returning at a minimum of 70% of annual free cash flow to shareholders.
Shares of EOG Resources have fallen 14.7% year-to-date but have really taken it on the chin in the last month, declining 16.9%. It’s cheap, with a forward P/E of 9.5. A P/E under 10 is usually considered a dirt-cheap stock.
The Zacks Consensus Estimate for 2025 is looking for $11.09. EOG Resources made $11.62 last year so that is a decline of 4.6%.
EOG Resources is currently paying a dividend yielding 3.5%.
Is EOG Resources a value or a trap in 2025?
What Else Do You Need to Know About Energy Stocks Right Now?
Tune into this week’s podcast to find out.