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Energy Sector
The energy sector refers to a category of companies that are primarily engaged in the production or supply of energy. This sector includes companies involved in the exploration and development of oil or gas reserves, as well as drilling and refining of oil and gas. It also comprises companies operating within the renewable energy spectrum, such as wind, solar, hydroelectric and biofuels.
Below we provide brief analysis of 5 Halal stocks from the energy sector.
Note: The Shariah compliance figures below are given based on Musaffa Shariah-compliance screening of 2024 first quarter financial results. Both the Shariah-compliance status and the Shariah-compliance figures may undergo changes based on the screening of subsequent financial results.
1. Exxon Mobil Corp (XOM)
Listed on the New York Stock Exchange (NYSE), Exxon Mobil Corp. engages in the exploration, development, and distribution of oil, gas, and petroleum products. With a market cap of 507 billion USD, the company offers 22.39% expected annual return (based on 1 year median target stock price and an annual dividend yield of 3.33%). It has lower risk, being 0.89x as volatile as the SPY. The business activity of the company comprises of 96.32% Halal income, 3.14% doubtful income and 0.53% not-Halal income. Interest-bearing assets and interest-bearing debt account for 8.98% and 10.89% of the trailing 36-month average market capitalization, respectively.
2. Chevron Corp (CVX)
Also listed in NYSE, Chevron Corp. provides administrative, financial management, and technology support for energy and chemical operations. The market capitalization of the company is around 290 billion USD. Chevron offers 22.81% expected annual return (based on 1 year median target stock price and annual dividend yield of 4.01%) and moderate risk (1.02x as volatility as the SPY). The company has 2.95% doubtful and 0.31% not-Halal income, totaling below 5%. Interest-bearing assets and interest-bearing securities stand at 10.34% and 8.17% of the trailing 36-month average market capitalization.
3. EOG Resources Inc (EOG)
Another NYSE listed company, EOG Resources, Inc. is involved in the exploration, development, production and marketing of crude oil and natural gas. With nearly 70 billion USD market capitalization, it offers 25.73% expected annual return (based on 1 year median target stock price and annual dividend yield of 4.09%). The stock is 1.08x as volatile as the SPY, indicating moderate risk. The company’s business activity incudes 95.26% Halal and 4.74% not-Halal income. Interest-bearing assets and interest-bearing debt comprise 8.15% and 5.84% of the trailing 36-month average market capitalization.
4. Pioneer Natural Resources Co (PXD)
Pioneer Natural Resources Co., also listed in the NYSE, secures 63 billion USD market capitalization. The company operates as an independent oil and gas exploration and production company. The stock is 1.16x as volatile as the SPY, offering an expected annual return of 7.61% (based on 1 year median target stock price and annual dividend yield of 2.82%). The company earns 99.37% Halal, 0.63% not-Halal income and has no doubtful income. Interest-bearing asset and interest-bearing securities account for 0.88% and 9.32% of the trailing 36-month average market capitalization.
5. Schlumberger NV (SLB)
Schlumberger NV engages in the provision of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry. Schlumberger NV is also listed on the NYSE. The market capitalization of the company exceeds 64 billion USD. Expected annual return of 53.65%(based on 1 year median target stock price and annual dividend yield of 2.33%) accompanies the moderate risk of being 1.20x as volatile as the SPY. The business activity of the company involves 98.98% Halal, 0.58% doubtful and 0.44% not-Halal income. The ratio of interest-bearing assets and interest-bearing debt to the trailing 36-month average market capitalization is 5.64% and 19.68%, respectively.
Source of financial figures: Musaffa, June 11, 2024