What Is One of the Best Energy Stocks to Hold for the Next 10 Years?
Key Points
Chevron has operations in all three main phases of the oil and gas ecosystem.
The energy giant can be a good source of income for many investors' portfolios.
- 10 stocks we like better than Chevron ›
Energy companies can often float under the radar until something happens that brings them to light. In this case, it's the rising gas prices that many consumers are starting to feel in their wallets.
Some people use short-term price jumps as a reason to hurry and buy shares of a particular energy stock, but a better approach is to focus on a stock you can comfortably hold for the next decade or longer. Chevron (NYSE: CVX) fits that description.
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The reason Chevron is one of the best energy companies to own over the next decade is that it operates in all three major phases of the oil and gas ecosystem: upstream, midstream, and downstream. Upstream involves finding and extracting oil from the ground; midstream involves transporting and storing oil; and downstream involves refining it into gasoline and selling it.
Having a hand in all three phases helps keep Chevon's business consistent and relatively stable when one segment faces a specific issue. For example, low oil prices could slow down Chevron's upstream business, while higher transportation costs could make its midstream business more expensive. When one is down, the other two segments can pick up some of the slack.
Although Chevron's stock is up over 26% year to date (as of March 16), I wouldn't invest expecting this performance year in and year out. However, it can be a good income source, with a dividend yield that's routinely nearly three times the S&P 500 average.
Should you buy stock in Chevron right now?
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron. The Motley Fool has a disclosure policy.
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