Oil Stocks: Long-Term Performance of Oil Stocks

Oil stocks have gotten a lot of attention in the past two years as the price of oil has fallen from $100 to $30 and has caused a lot of (hopefully unrealized) capital losses for investors in oil stocks and many of the dividends for oil stocks have come into question. There is a lot of historical data that suggests the long-term returns for oil stocks is excellent, and the returns become even more extraordinary if you are able to establish long-term positions in oil stocks at favorable valuations.

First, I’d like to direct your attention on some historical data points for oil stocks, which I am taking from page 53 of Jeremy Siegel’s classic work “Stocks For The Long Run.” In 1964, Standard Oil of NJ (now ExxonMobil) constituted 5.0% of the market cap of the S&P 500 and went on to deliver 13.82% annual returns for … Read the rest of this article!