How to Invest in Oil
Find oil company stock., Compare the performance of oil company stocks., Place your order.
Step-by-Step Guide
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Step 1: Find oil company stock.
You probably already know the names of many large oil companies:
ExxonMobil, Chevron, and Royal Dutch Shell.You can find other oil companies at your online broker.
You can open an online brokerage account easily with Betterment, E-Trade, Fidelity, Robinhood, Loyal3, or Charles Schwab.
Provide personal and financial information, such as your tax ID number, address, and net worth. -
Step 2: Compare the performance of oil company stocks.
Before buying, research each company’s financial performance.
Find the company’s annual report, which is publicly available at the SEC’s website.
Your online broker should also have annual and quarterly reports.
Look at the following:
Revenue.
This is the amount of money the oil company brought in.
In particular, look at the operating income.
Net income.
This is the amount the oil company made after deducting operating expenses, taxes, and depreciation.
Earnings per share.
Divide the earnings by the number of shares.
This allows you to compare different oil companies.
Debt level.
High debt levels usually indicate that the company cannot fund its operations using its own money. , Purchasing oil company stock is generally straightforward.
However, you can buy stock through your broker by making a couple different kinds of orders.
Consider the following:
Market order.
This is the easiest type of order.
You immediately buy the stock and agree to pay the best available market price.
There’s a lag between the moment you submit your request and the moment your broker buys the stock, so the price you are quoted might be different than what you pay.
Limit order.
You might think the current price is too high, but you want to buy the stock when the price declines.
In this situation, you can put in a limit order.
Instruct your broker to buy the stock when it reaches your preferred price. -
Step 3: Place your order.
Detailed Guide
You probably already know the names of many large oil companies:
ExxonMobil, Chevron, and Royal Dutch Shell.You can find other oil companies at your online broker.
You can open an online brokerage account easily with Betterment, E-Trade, Fidelity, Robinhood, Loyal3, or Charles Schwab.
Provide personal and financial information, such as your tax ID number, address, and net worth.
Before buying, research each company’s financial performance.
Find the company’s annual report, which is publicly available at the SEC’s website.
Your online broker should also have annual and quarterly reports.
Look at the following:
Revenue.
This is the amount of money the oil company brought in.
In particular, look at the operating income.
Net income.
This is the amount the oil company made after deducting operating expenses, taxes, and depreciation.
Earnings per share.
Divide the earnings by the number of shares.
This allows you to compare different oil companies.
Debt level.
High debt levels usually indicate that the company cannot fund its operations using its own money. , Purchasing oil company stock is generally straightforward.
However, you can buy stock through your broker by making a couple different kinds of orders.
Consider the following:
Market order.
This is the easiest type of order.
You immediately buy the stock and agree to pay the best available market price.
There’s a lag between the moment you submit your request and the moment your broker buys the stock, so the price you are quoted might be different than what you pay.
Limit order.
You might think the current price is too high, but you want to buy the stock when the price declines.
In this situation, you can put in a limit order.
Instruct your broker to buy the stock when it reaches your preferred price.
About the Author
Frances Campbell
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