With the price of oil stocks getting ever higher, and reports of Exxon-Mobil (XOM) making record profits, it makes sense to want to research oil stocks.
Let’s look at Exxon-Mobil as they are the big guys in the oil stocks sector. They have a PE of 10.69. That is very low! And yield is 2.10% that is pretty decent. But it kind of depends on gas prices staying where they are at. And is the government going to leave them alone, or are they going to start limiting Exxon’s profits, or levying some large taxes? Analysts say that Exxon’s annual growth over the last 5 years was 25.7%. But they are predicting annual growth of only 6.6% over the next 5 years. The PEG is 1.56, which kind of points to the stock being overpriced for future earnings growth estimates. Exxon’s debt is relatively low.
Who is #2? Looking at the holdings in the Dow Jones Energy Index, that would be Chevron (CVX). Cheron has an even lower PE of only 8.5, and a higher yield of 3.6%. The growth numbers are about the same as Exxon’s. Chevron has a touch more debt than Exxon, but still not much.
The number 3 slot in the Dow Jones Energy Indexx is much farther back. How about just investing in the Dow Jones Energy Index? It is being sold as an index fund by iShares under the symbol IYE. That way you can get a little bit of all the gas and oil comapnies.

Another way to go is invest in Canadian Energy Trusts. I currently own a couple of these: PrimeWest Energy Trust (PWI) & Pengrowth Energy Trust (PGH). I hold them in my Roth IRA. They return a good yield. They are little trickier than owning American oil stocks, but they are worth researching.

I would beware of investing too much in oil since you are investing in a very narrow sector. It all relies too much on a single product. And we have very little control over the supply and price of that product.