As the stock market continues to grow, investors will naturally be faced with a variety of opportunities to maximize profits.

From the energy sector benefiting from rising crude oil prices to high-dividend stocks that provide income stability, understanding the US stock landscape could be the key to your investment success in 2024.

As the largest and most liquid market, US stocks offer access to large-cap global companies, supported by economic stability and technological innovation.

In addition, regulatory transparency makes it a top choice for investors looking for long-term opportunities.

The energy sector is often a mainstay when oil prices rise, offering the potential for big profits. Meanwhile, high-dividend stocks provide stable passive income, making them an ideal combination for a strong and balanced portfolio.

Also Read: Easy Global Investing: How to Buy Foreign Stocks

 

US Stock Market Overview

The US stock market is currently showing interesting dynamics with a focus on economic recovery and the response to monetary policy.

Meanwhile, major indices, such as the S&P 500 and Nasdaq, continue to show investor optimism despite ongoing volatility due to global factors such as inflation and geopolitical tensions.

The energy sector, especially oil and gas, remains an important component of the global economy. The surge in crude oil prices has provided huge profits for energy companies, while also affecting the prices of other commodities.

The strategic position of the sector makes it relevant, both as a driver of economic growth and as an investment opportunity.

On the other hand, stocks with high dividends are a mainstay for investors seeking stability amid uncertainty.

By providing a consistent passive income stream, these stocks help reduce portfolio risk and provide protection from market fluctuations, especially in uncertain economic conditions.

Also Read: Top 7 Saham Blue Chip Amerika dengan Dividen Terbesar

 

Energy Sector Stocks: Focus on Oil and Gas

It is important to note that the energy sector, especially oil and gas, has become one of the main pillars of global investment.

With increasing demand and volatile crude oil prices, this sector offers great opportunities for investors looking to capitalize on global economic trends.

Amid market uncertainty, energy stocks are often a strategic choice for portfolio diversification and growth potential.

Rising crude oil prices tend to boost the revenues of companies involved in oil exploration and production, such as ExxonMobil (XOM) and Chevron (CVX).

Higher oil prices allow these companies to earn larger profit margins from their production. Here is a list of leading stocks in the oil and gas sector.

1. ExxonMobil (XOM)

ExxonMobil is one of the world’s largest energy companies involved in oil and gas exploration, production, and distribution.

Rising crude oil prices can boost the revenues and profits of this company. However, in the third quarter of 2024, ExxonMobil reported a decline in earnings due to lower commodity prices and weaker refining margins.

2. Chevron (CVX)

Chevron is also a major player in the global energy industry, with operations spanning oil and gas exploration and production. Like ExxonMobil, rising crude oil prices can boost Chevron’s revenue and profits.

However, in the third quarter of 2024, Chevron saw a decline in earnings due to lower commodity prices and weaker refining margins.

3. Schlumberger (SLB)

It is important to note that Schlumberger is a company that provides services and equipment to the oil and gas industry.

Rising oil prices can drive increased drilling and production activity, which in turn increases demand for their services.

 

Equipment and Services Subsector Stock List

Focus on companies that support the oil and gas industry, such as Schlumberger and Halliburton.

Companies that provide services and equipment to the oil and gas industry, such as Schlumberger (SLB) and Halliburton (HAL), also feel the impact of fluctuating oil prices.

Rising oil prices can drive increased drilling and production activity, which in turn increases demand for their services.

According to the latest analysis from alpha-sense.com, both Halliburton and Schlumberger are estimated to have investment return potential of around 50-51%, making them attractive choices for investors.

1. Schlumberger Ltd. (SLB)

Price: $37.81 (+$0.01, +0.01%)
After Hours: $37.90 (+$0.09, +0.24%)

2. Halliburton Co. (HAL)

Price: $26.96 (+$0.17, +0.63%)
After Hours: $26.94 (-$0.02, -0.07%)

 

Midstream and Downstream Sector

Opportunities in distribution and refining companies, such as Phillips 66.

Companies operating in the midstream and downstream sectors, such as Phillips 66 (PSX), which focuses on distribution and refining, are also affected by changes in oil prices.

While they may not directly benefit from higher crude prices, increased activity in the upstream sector can increase the volumes they handle, potentially boosting revenues.

Phillips 66 (PSX):

• Price: $111.99 (-$0.59, -0.52%)
• After Hours: $112.67 (+$0.08, +0.07%)

Also Read: These Are the 5 US Stocks with the Biggest Dividends, You Must Check Them Out!

Tips for Choosing Stocks in the Energy Sector and High Dividends

Here are some tips that can be used to choose stocks in the energy sector with high dividends.

1. Use a Stock Screener

A stock screener tool like the one available at Investing.com allows you to filter stocks based on certain criteria, such as stock price, market capitalization, and dividend yield.

By using a stock screener, you can easily find stocks that match your investment preferences.

2. Fundamental Analysis

Focus on the Price-to-Earnings (P/E) ratio, dividend yield, and the company’s financial statements.

A low P/E ratio can indicate that the stock is undervalued, while a high dividend yield indicates greater passive income potential.

In addition, be sure to also check the financial statements to assess the company’s financial health.

3. Portfolio Diversification

Combine high-dividend energy stocks in your portfolio to reduce risk and increase potential profits. Diversification will help protect investments from unexpected market fluctuations.

Also Read: Portfolio Diversification Is an Investment Strategy, Here’s How to Do It

Challenges and Risks of Investing in American Oil Stocks

Investing in stocks of energy companies in the United States offers potential profits, but also comes with challenges and risks that need to be considered carefully. Here are some factors to consider.

1. Oil Price Fluctuations

Global crude oil prices are highly volatile and are influenced by various factors, including geopolitical dynamics, global supply and demand, and OPEC policies.

In this case, oil price fluctuations can affect the revenue and profitability of energy companies.

For example, in the third quarter of 2024, ExxonMobil and Chevron experienced a decline in profits due to lower commodity prices and weaker refining margins.

2. Possible Dividend Cuts

Energy companies that offer high dividends may face pressure to maintain dividend payments during periods of recession or falling oil prices.

If revenues decline, companies may be forced to reduce or even stop dividend payments to maintain their financial health.

Therefore, it is important to monitor the company’s financial performance and dividend policy periodically.

3. Government Regulation

Government policies related to energy, such as environmental regulations, energy subsidies, and international trade policies, can affect the operations and profitability of energy companies.

Changes in regulations may require additional investment to comply with new standards or may affect operating costs.

For example, the Indonesian government’s policy in addressing rising global oil prices can affect state revenues and energy subsidies.

Conclusion

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In conclusion, the US stock market offers great opportunities, especially in the energy sector which benefits from rising crude oil prices.

Energy stocks and high dividends can be ideal choices for a balanced portfolio, providing potential profits and passive income.

Rising crude oil prices benefit energy companies such as ExxonMobil (XOM) and Chevron (CVX), while service companies such as Schlumberger (SLB) and Halliburton (HAL) also benefit.

High dividend stocks are an attractive choice for stable passive income. On the other hand, it is important to use a stock screener and analyze the P/E ratio and financial statements when choosing stocks.

While the energy sector offers great potential, oil price fluctuations, dividend cut risks, and changes in government regulations are factors to watch out for.

For additional information, INDODAX will soon introduce a new feature that allows its users to invest in stocks listed in the United States.

This feature allows users to expand their portfolio with more than 50 US stocks, as well as crypto assets, all of which can be managed in one integrated account on the INDODAX platform.

FAQ

1.Why are stocks in the oil and gas sector attractive when oil prices rise?

High oil prices increase the profit margins of energy companies, especially in the upstream segment.

2.Are high dividend stocks always safe to invest in?

Not always. Risks can arise if the company experiences financial difficulties and has to cut dividends.

3.How to use a stock screener?

The stock screener allows you to filter stocks based on sector, financial ratios, and other criteria. Select the filter according to your investment goals.

4.What are the best sectors to invest in in 2024?

The answer depends on your goals. The energy sector has great potential, while high dividend stocks are suitable for stability.