Energy Stocks: Oxy or ET for Your Portfolio?
Investors are looking for ways to add energy exposure to their portfolios amid the ongoing geopolitical conflict in the Middle East.
The Strait of Hormuz, a key transit chokepoint, has been effectively shut down, severely constraining oil and natural gas supply.
This reduced supply has led to rising prices, making it clear that oil and natural gas remain vital to modern society's functioning.
Two energy companies are being touted as options: Occidental Petroleum (OXY) and Energy Transfer (ET).
Oxy is an oil and natural gas producer with operations in the Middle East and Africa, but most of its production and sales are U.S.-based. This means it's less affected by the conflict.
However, Oxy's financial results are volatile due to commodity prices.
Energy Transfer, on the other hand, is a midstream master limited partnership (MLP) that owns energy infrastructure assets across North America.
The company charges fees for using its assets to move oil and natural gas, making volume rather than price key to its success.