Yahoo Finance Price of gas soars to $7.29 in California city, above federal minimum wage — 3 oil stocks poised for profit
Gas prices can fluctuate widely, even within the same area, yet one exceptionally high price at a Menlo Park, California, station recently was quite notable.
NBC Bay Area reporter Scott Budman recently posted a photo on X (formerly known as Twitter) April 21 of a Chevron gas station that displayed regular self-serve gas priced at $7.29 a gallon.
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“One gallon of gas (Menlo Park) above the federal hourly minimum wage,” he commented.
Budman was referencing the U.S. federal minimum wage, currently set at $7.25 an hour. However, many states have their own minimum wage laws. California, for instance, has one of the highest minimum wages in the country at $16 an hour.
California is among the states with the highest gas prices on average, according to the American Automobile Association, with a gallon of regular gasoline going for $5.42 as of April 23. The national average was $3.67 a gallon.
In spite of this one exceptionally priced location, most gas stations in the area appear to be selling fuel for under $6 a gallon, according to GasBuddy.
This also doesn’t appear to be the first time gas prices have hit the federal minimum wage mark in Menlo Park. Getty Images photographer Justin Sullivan snapped a photo on May 25, 2022, of a Chevron station in the city selling gas for $7.25 a gallon.
Savvy investors might see these high prices in California and want to look at companies poised to capitalize on the current market dynamics. For instance, there may be upside in these three oil stocks.
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Shell (NYSE:SHEL)
Headquartered in London, U.K., Shell is a multinational energy giant with operations in more than 70 countries. With more than 47,000 Shell-branded retail service stations, the company says it serves around 33 million customers on a daily basis.
It’s a staple for global investors, too. Shell is listed on the London Stock Exchange, Euronext Amsterdam and the New York Stock Exchange (NYSE).
The company’s NYSE-listed shares are up 10% in 2024.
Piper Sandler analyst Ryan Todd sees an opportunity in the oil and gas supermajor. The analyst has slapped a price target of $85 per share. Considering that Shell trades at around $72.80 today, Todd’s price target implies a potential upside of around 17%.
Chevron (NYSE:CVX)
Chevron is another oil and gas supermajor that could benefit from a commodity boom.
In 2023, the company reported earnings of $21.4 billion and cash flow from operations of $35.6 billion.
Earlier this year, Chevron’s board approved an 8% increase to the quarterly dividend rate to $1.63 per share.
The stock has climbed around 8.5% in 2024.
Barclays analyst Betty Jiang has given Chevron a price target of $203 — implying a potential upside of 25% from current levels.
Exxon Mobil (NYSE:XOM)
Commanding a market cap of over $470 billion, Exxon Mobil is bigger than Shell and Chevron.
The company also boasts the strongest stock price performance among the three in 2024 — Exxon shares are up 18% year-to-date.
It’s not hard to see why investors like the stock: the oil-producing giant gushes profits and cash flow. Exxon reported $36.0 billion in profits in 2023 and generated $55.4 billion of cash flow from operating activities.
Solid financials allow the company to return cash to investors. In 2023, it distributed $32.4 billion to shareholders, including $14.9 billion in dividends and $17.4 billion in share repurchases.
UBS analyst Josh Silverstein put a price target of $150 on Exxon — around 24% above where the stock sits today.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
