If you are looking into energy stocks (which are rather volatile right now, what with all the oil fluctuations), it can be difficult to decide what to go with. ExxonMobile (XOM) and Chevron (CVX) seem a little expensive — even if they are gaining along with the rest of the stock market. This is part of the reason that some investors like XTO Energy (XTO).
Photo: d70focus, Creative Commons, Flickr
XTO has a very low price right now and, while it has had ups and downs like other stocks on the market (especially energy stocks), it is pretty close to the same price now that it was at the beginning of the year — perhaps a little higher. But one of the reasons that XTO is among the more potentially steady energy stocks has to do with its strategy. Stock Trading To Go points this out about XTO Energy:
XTO possesses oil and gas reserves in geopolitically safe areas. Market value of their natural reserves exceeds $60 per share and a high amount of 2009 production has been hedged at energy prices that are higher than prevails today. Therefore, XTO offers excellent value with limited exposure to volatile commodity prices.
However, if you are interested in environmentally-friendly investing, any energy stock is going to be dicey, and XTO is no different. The company relies mainly on fossil fuels, and does very little in the way of diversifying to alternative energy investment. The company offers platitudes about limiting environmental impacts, but it really is hard to give a company steeped in fossil fuels an environmental stamp of approval. At any rate, XTO does produce fewer wells, but through an approach that combines the processes of drilling new wells and completing the reservoirs, oil is obtained more efficiently.
The bottom line is that XTO offers some possibility in energy investing and could offer decent returns.
Disclosure: I do not own oil stocks.