| Four Oil Stocks to Buy Amid the Market's Pullback: Phillips 66 (PSX)
Houston, Texas-based Phillips 66 (NYSE: PSX) is another oil industry buy recommendation. The company reported second quarter adjusted earnings per share (EPS) of $2.31, exceeding Citigroup's estimates of $1.97. Improved midstream business performance drove the outperformance, along with record volumes, reduced costs and about $30 million in one-time benefits.
Refining utilization reached 98%, the company's highest in five years, leading to heightened throughput. But refining adjusted EBIT still declined quarter over quarter. PSX returned $1.325 billion to shareholders in 2Q, roughly in line with consensus of $1.342 billion. Total return of cash now stands at $11.2B since July 2022 (versus $13 billion-$15 billion target by year-end), Citigroup wrote in a research note.
Phillips 66's Rodeo facility in the San Francisco Bay Area increased rates to approximately 50,000 BPD (800 million gallons per year), reaching the company's goal of achieving full capacity by the second quarter of 2024. The June 26 announcement marked a significant step in Phillips 66's commitment to play a meaningful role in the energy transition and provide customers with reduced-carbon solutions.
Rodeo is now listed as a separate line item, as expected. The full conversion of the Rodeo Renewable Energy Complex expands PSX's commercial-scale production and positions Phillips 66 as a leader in renewable fuels.
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Four Oil Stocks to Buy Amid the Market's Pullback: Northern Oil and Gas (NOG) Northern Oil & Gas Inc. (NYSE: NOG), based near Minneapolis, Minnesota, is a "very cheap" energy stock with a price-to-earnings ratio (P/E) of just 4.9335 and surprising growth in its oil and gas properties, wrote Skousen to his Five Star Trader subscribers. With less than 40 employees, NOG operates largely under the radar, he added. The company's unique business model avoids drilling wells and operating rigs, but instead takes partial positions in more than 10,000 operating wells in the Williston Basin, the Appalachian Basin and the Permian Basin in the United States. Northern Oil & Gas has one of the highest profit margins he recalls ever seeing in an energy stock. Northern Oil's Chief Technical Officer James Evans said earlier this year that the company's business model features capital discipline, cost control and downside protection through diversification and a "diligent hedging policy." NOG also aligns executive compensation to the company's performance. A buy recommendation also is placed on the stock by Citigroup. The investment firm wrote that Northern Oil's performance was driven by production topping expectations, as oil was in line while natural gas outperformed and lease operating expenses (LOE) beat estimates. Northern Oil's capital spending fell below estimates and natural gas pricing surprised to the upside. The company's focus remains on growth and its efficiency-oriented strategy with near-term digestion of recent acquisitions likely to remain the priority, Citigroup wrote. The investment actually raised its target price on NOG to $52 per share due to the company's solid growth trajectory and prudent operational strategy buoyed by a relatively low-risk business model balanced against a volatile commodity pricing environment. 
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