Three Completely Obvious Oil Shares to Purchase Within Your $500 Budget Immediately
Under President Trump's renewed focus on fossil fuels, oil stocks have regained investor attention. On his second inauguration day, Trump declared a national energy emergency, froze federal funding for clean energy, and vowed to bolster the domestic oil and gas industry.
However, it's important to note that Trump's push doesn't imply a rosy future for every oil and gas company. Factors like proposed tariffs on oil prices remain uncertain. Yet, there are compelling oil stocks worth considering, even with a budget as modest as $500. Here are three top picks:
A seasoned oil heavyweight with ambitious aspirations
For any investor eyeing U.S. oil industry growth under Trump, Chevron (CVX, -0.82%) is an indispensable choice. Established as the Pacific Coast Oil company in 1879, Chevron has come a long way and ranks among the world's leading oil and gas companies today.
Chevron is aiming for a compound annual growth rate (CAGR) of approximately 6% in production by 2026. This ambitious plan is expected to generate $10 billion in additional free cash flow (FCF) by 2026, even at a Brent crude oil price of $70 per barrel. At a lower $60 oil price, Chevron still anticipates generating $9 billion in extra FCF in the subsequent two years. Key contributors to this growth will be Chevron's oil project in Kazakhstan and expansion in the Permian Basin.
The potential acquisition of Hess (HES, -1.01%) could supercharge Chevron's FCF growth further. The Federal Trade Commission (FTC) has recently finalized a consent order to address antitrust concerns, paving the way for the $53 billion all-stock deal. Chevron expects the merger to close in the near future, and the transaction will significantly bolster its portfolio, allowing it to raise around $15 billion from the sale of non-core assets.
Chevron's prowess as a dividend growth stock is unmatched, having boosted its dividends for an impressive 37 consecutive years. By investing in around three shares of this formidable oil titan for $500, you can bank on Chevron's growth while reaping a respectable 4.4% yield on the stock.
A value-driven oil stock poised for revival
I've been advocating for Occidental Petroleum (OXY, -0.69%) stock for quite some time now, and I remain bullish. With a budget of $500, you can buy about 10 shares of this value stock.
With its $12 billion acquisition of CrownRock last year, Occidental's stock briefly plummeted as investors fretted over mounting debt threatening to hamper growth. Since then, the stock has dipped nearly 19% in a year.
However, Occidental has a different game plan this time around. It's prioritizing debt reduction, even temporarily halting share repurchases to allocate resources to debt reduction. Occidental managed to slash $4.5 billion in debt in just five months after acquiring CrownRock, achieving its debt reduction goal ahead of schedule.
During its latest earnings call, Occidental reaffirmed its intention to continue deleveraging while maintaining a focus on sustainable dividend growth. By encouraging share price appreciation, it aims to compensate for growth through its cash flows. The company increased its quarterly dividend by a significant 9% during its latest earnings call and plans to unload assets worth $1.2 billion this year while investing in oil and gas, chemicals, and low-carbon ventures.
Given Occidental's strategic focus on strengthening its balance sheet and continuing growth while preserving dividends, I believe this is one no-brainer oil stock to hold for the long haul. Legendary investor Warren Buffett is also ramping up his Occidental shareholdings.
A rock-solid oil dividend stock with impressive yields
Enterprise Products Partners (EPD, -0.39%) is a high-yield dividend stock that's a must-buy, particularly in volatile oil market environments. $500 can net you around 15 shares of this oil stock while earning a tantalizing 6.4% yield.
Enterprise Products delivered record net income of $5.9 billion in 2023, inducing an almost 7% growth in earnings per share (EPS) over the previous year. Empowered by a record DCF of $7.8 billion in 2023, the company boosted its dividend by 5%. Enterprise Products has consistently raised its dividend for more than 25 consecutive years, contributing substantially to the stock's total returns over time.
With a stellar DCF, Enterprise Products plunged into 2025 with a solid financial footing. As a midstream energy infrastructure company, Enterprise Products generates stable cash flows through long-term contracts for crude oil, natural gas, and other product storage and transportation. This steady cash flow ensures regular dividends while supporting growth ventures, making 2025 a promising year for this high-yield stock.
- Despite the uncertain proposed tariffs on oil prices, investing in certain oil stocks like Chevron (CVX) can be worth considering, even with a budget of $500.
- Chevron's growth plans include a CAGR of approximately 6% in production by 2026, expected to generate $10 billion in additional free cash flow, with key contributors in Kazakhstan and the Permian Basin.
- Occidental Petroleum (OXY) is poised for revival after its debt reduction efforts, prioritizing shareholder value in its focus on debt reduction, dividend growth, and share price appreciation.
- Enterprise Products Partners (EPD) is a high-yield dividend stock with a stellar DCF, consistently raising its dividend for over 25 years and generating stable cash flows through long-term contracts in the midstream energy infrastructure sector.
