Chevron, Exxon Mobil: Gasoline Stocks to Pump Up Your Portfolio

NEW YORK (TheStreet) -- Drivers paid a national average of $3.41 per gallon of gasoline over this year's Labor Day holiday, down from $3.59 last year and down from the record holiday high set at $3.83 in 2012.

With vacation season over, investors should consider investing in shares of Chevron (CVX) , Marathon (MRO) , Royal Dutch Shell (RDS.A) or Exxon Mobil (XOM) , but avoid shares of Hess Corp (HES) .

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It's all about valuations, dividend yields, technical analysis, and value levels and risky levels. The four gasoline stocks to buy have 12-month trailing price-to-earnings ratios between 12 and 15 with dividend yields between 2% and 4%. Hess has an elevated P/E ratio and low dividend yield.

Chevron and Exxon Mobil are components of the Dow Jones Industrial Average; only four other Dow stocks have lower P/E ratios but also have lower dividend yields. Five other Dow stocks have higher dividend yields but also have higher P/E ratios. This makes the oil giants prudent portfolio candidates.

Here's how to trade the five gas station stocks.

Chevron ($129.45) set an all-time intraday high at $135.10 on July 24 then followed crude oil lower trading as low as $124.58 on August 5. The stock closed last week just below its 50-day simple moving average at $129.62.

The stock has a 12-month trailing price-to-earnings ratio of 12.3 and dividend yield at 3.3%.

The weekly chart shifts to negative given a close this Friday below its five-week modified moving average at $128.27. Weekly and monthly value levels are $126.65 and $122.28, respectively, with annual and semiannual risky levels at $132.08 and $132.91, respectively.

Marathon ($41.69) set an all-time intraday high at $41.74 on Friday and has been above its 200-day simple moving average at $36.39 since April 14. I have noticed several new Marathon stations in Tampa in recent months.

The stock has a 12-month trailing price-to-earnings ratio of 14.8 and dividend yield at 2.0%.

The weekly chart is positive with its five-week MMA at $39.70. Weekly and monthly value levels are $39.58 and $39.31, respectively, with a semiannual pivot at $40.09 and quarterly and semiannual risky levels at $43.46 and $44.69, respectively.

Royal Dutch Shell ($41.69) set a multiyear $83.42 on July 2 then declined as low as $78.72 on August 13 and ended Friday below its 50-day SMA at $81.42 on Friday. This stock trades in the U.S. market as an ADR.

The stock has a 12-month trailing P/E of 12.1 and dividend yield at 4.0%.

The weekly chart shifts to negative given a close on Friday below its five-week MMA at $80.56.

Exxon Mobil ($99.46) set an all-time intraday high at $104.76 on July 29 then traded as low as $97.63 holding its 200-day SMA then at $97.73. The 200-day ended last week at $98.44.

The stock has a 12-month trailing price-to-earnings ratio of 12.6 and dividend yield at 2.8%.

The weekly chart stays negative with a close this Friday below its five-week MMA at $100.09. Weekly and monthly value levels are $98.00 and $96.88, respectively, with a semiannual pivot at $100.68 and annual and quarterly risky levels at $103.05 and $103.19, respectively.

Hess ($101.10) set a multiyear intra104.50 on July 30 then traded as low as $96.93 on August 18 and ended last week above its 50-day SMA at $99.13.

The stock has an elevated 12-month trailing P/E at 20.5 and dividend yield of just 1.0%.

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The weekly chart shifts to negative given a close this Friday below its five-week MMA at $98.61. Annual and monthly value levels are $98.57 and $98.12, respectively, with a quarterly risky level at $106.81.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

Follow @Suttmeier

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

 

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff


TheStreet Ratings team rates CHEVRON CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHEVRON CORP (CVX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity." You can view the full analysis from the report here: CVX Ratings Report

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