While the broader market and stocks in several major sectors, like tech, are in the red due to macro headwinds, energy stocks have been rallying this year. Improved demand following the reopening of global economies led to higher oil and gas prices. Also, Russia’s invasion of Ukraine caused supply disruptions and a further rise in energy prices.

However, oil and gas prices have been volatile recently and might continue to be due to several factors including tight supply, the impact of the European Union’s decision on a potential embargo of Russian oil, and the easing of China’s Covid-19 lockdowns.

Against this backdrop, using the TipRanks Stock Comparison tool I placed ConocoPhillips (NYSE:COP), Exxon Mobil (NYSE:XOM), and Schlumberger (NYSE:SLB) against one another to pick the energy stock that Wall Street analysts believe will continue to rise even after a strong run thus far in 2022.

TipRanks’ stock comparison tool enables comparison of up to 10 stocks across several parameters, including analysts’ consensus ratings, analysts’ price targets, yearly gains and market capitalization.

Energy Stocks: ConocoPhillips (COP)

ConocoPhillips is one of the leading exploration and production companies, which boasts $93 billion of total assets and operations in 13 countries. The company bolstered its position with the $9.5 billion acquisition of Shell’s (NYSE:SHEL) Permian Basin assets in December 2021.

Elevated prices and higher volumes helped ConocoPhillips deliver adjusted earning per share (EPS) of $3.27 in the first quarter (Q1), reflecting a considerable increase from 69 cents in the prior-year quarter.

However, the company guided for lower Q2 production of 1.67 to 1.73 million barrels of oil equivalent per day, compared to about 1.75 million in Q1. ConocoPhillips cited the impacts of seasonal turnarounds planned in Europe and Canada and unfavorable weather experienced in April in Bakken as the reasons for a lower production outlook.

Given its strong cash flow generation, ConocoPhillips boosted its 2022 shareholder returns by 25% to $10 billion, with the incremental $2 billion distribution to be made via share repurchases and variable return of cash (VROC) payments. It distributed $2.3 billion to shareholders in Q1 through share repurchases, ordinary dividends, and VROC payments.

Recently, Barclays (NYSE:BCS) analyst Jeanine Wai raised her price target on ConocoPhillips to $132 from $131 and reiterated a “buy” rating. Wai believes that payout yields will be a primary driver of stock price movement this year for exploration and production companies like ConocoPhillips, with the sustainability of yield gaining more importance as the year progresses.

Overall, ConocoPhillips scores a “strong buy” consensus rating based on 12 “buys and two “holds.” The average ConocoPhillips price target of $129.31 implies upside potential of 12.62% from current levels. Shares have advanced 41.7% year-to-date, making it one of the great energy stocks out there.

Exxon Mobil (XOM)

The surge in energy prices helped integrated oil and gas giant Exxon Mobil double its Q1 EPS to $1.28 despite booking a 79 cent per share charge related to the company’s planned exit from Russia.

However, even after excluding this significant charge, the company’s adjusted EPS of $2.07 missed analysts’ expectations. Q1 results were impacted by weather, unfavorable mark-to-market derivative effects, and the price timing effects in the downstream business.

Exxon generated free cash flow of $10.8 billion and returned $5.8 billion to shareholders in Q1, including $2.1 billion through share repurchases. Exxon has now tripled its buyback program to up to $30 billion through 2023.

Argus (NYSE:ARGU) analyst Bill Selesky expects Exxon to gain from robust energy market fundamentals, an improving balance sheet, lower capital expenditure, and higher free cash flows. Selesky increased his 2022 EPS estimate to $9.52 from $6.40, as he expects continued high commodity prices over the remainder of the year. Based on his bullish views, Selesky raised his price target for Exxon Mobil stock to $104 from $92 and reiterated a “buy” rating.

Overall, Wall Street analysts are cautiously optimistic on the stock, with a “moderate buy” consensus rating based on 10 “buys” and 11 “holds.” Given the 40% year-to-date rise, the average Exxon Mobil price target of $95.18 implies a slight decline from the current levels.

Energy Stocks: Schlumberger (SLB)

Oilfield services company Schlumberger is benefiting from rising energy investments and a revival in exploration and production activities amid strong demand.

Despite suspension of its Russian operations and supply chain challenges, Schlumberger generated upbeat Q1 results, with revenue rising 14% to nearly $6 billion. Adjusted EPS grew 62% to 36  cents driven by significant year-over-year margin expansion in the Well Construction, Reservoir Performance, and Digital & Integration segments. Based on its robust fundamentals, Schlumberger announced a 40% increase in its quarterly dividend to about 17 cents per share.

HSBC (NYSE:HSBC) analyst Abhishek Kumar believes that Schlumberger will gain from accelerated investments in the short-cycle U.S. land market triggered by the rise in oil prices and increased investments by many countries to secure oil supply and boost production capacities.

The analyst feels that Schlumberger is well-positioned to enhance its margins through price hikes despite pressures related to commodities and workforce on the supply side. Kumar believes that improved earnings over the next two to three years should “translate into higher free cash generation and increased shareholder returns through higher dividends and share buybacks.” In line with his optimism, Kumar upgraded Schlumberger from a “hold” to a “buy” and increased the price target from $40.60 to $44.20.

Other analysts are in agreement with Kumar’s bullish stance, with the stock scoring a “strong buy” consensus rating based on 14 unanimous “buys.” The average Schlumberger price target of $50.73 implies 10.73% upside potential from current levels. Shares have rallied 26.4% so far this year.

Conclusion

Shares of these three energy stocks had an impressive run so far this year due to strong demand and a spike in energy prices. However, analysts see a higher upside potential in ConocoPhillips stock. Aside from regular dividends and share buybacks, the company has been rewarding its shareholders with VROC payments thanks to robust cash flows driven by a surge in oil prices.

What’s more, ConocoPhillips scores a Perfect 10 on TipRanks’ Smart Score system, indicating that it is more likely to outperform the market. This is a data-driven score that evaluates a stock based on eight key factors, including technical and fundamental indicators. While all of these are great energy stocks to buy, ConocoPhillips is a standout in the energy sector.

On the date of publication, Sirisha Bhogaraju did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Sirisha Bhogaraju has over 15 years of experience in financial research. She has written in-depth research reports and covered companies across various sectors, with a primary focus on the consumer sector. Sirisha has a master’s degree in finance.