On the whole, oil stocks are extremely profitable, but it is their volatile nature that can be risky for investors.
The best way to invest in oil stocks is through common stocks.
According to experts the oil reserves are drying up, but the demand for oil remains unabated.
In fact, the demand for oil has increased tremendously as the emerging economies in Southeast Asia grow.
These two factors have result in the price of oil skyrocketing.
On the other hand, oil companies still have the same operational costs more or less even though the cost of raw materials has increased marginally.
Hence, the overall revenue earned by oil companies is more than what it was a few years ago.
This means that if you invest in oil stocks, you will get a better dividend due to more revenue earned by the company and high price of oil in the global market.
While most oil companies are doing well and you can invest in any one of them, there are some that are performing better than others.
Before investing, you should find out the revenue of the company, the number of units sold in the last 5 years, the source of the raw material, source of revenue, the size of the company, the image of the company, dividend paying policies and any recent mergers, acquisitions or sales.
Finding out this information will allow you to get an idea about the company and its stability.
Also, check out the annual report of the company and opinions from experts on the company and its future.
Nonetheless, as mentioned previously, there are some oil stocks that performing better than others.
So, these are the companies that you should be looking at.
The oil stocks to invest in the year 2011 include the following: VAALCO Energy Inc: This is an extremely steady stock and the company is seeing a gradual increase in its revenue.
This stock is perfect for people who are looking for long term investments.
Plains Exploration and Production: Although a new entrant, the company has good projections where its revenue is concerned.
The company is involved in petrochemicals and natural gas production.
This is the best time to buy the stock of the company as in the future there are signs that the price of the stock will rise.
Occidental Petroleum: This is a huge company having operations in the Middle East, North Africa and South America.
The company has been present for a long time and has a record of making profits constantly.
The company offers excellent dividend payouts and this makes it one of the best oil stock investments in 2011.
Chevron Corporation: The company has been around for some time now and is considered as one of the best companies to invest in.
Experts predict that the dividend payout will be high this year, and hence, it will be worthwhile to invest in its shares.