Ask Matt: Are 'big oil' stocks worth a shot?

Q: Are 'big oil' stocks worth a shot?

A: Depressed oil prices are clobbering big oil companies. Oil prices and energy stocks will bounce back - but timing the recovery of crude has eluded many a speculator.

Take Exxon Mobil - the largest of the big oil companies. The company July 31 reported a crushing 48% decline in adjusted quarterly profit in the second quarter of $1.06 a share. During that time, revenue dropped by a third. Both profit and revenue missed expectations.

Given that Exxon's shares are down by about 10% this year, some investors might think it's time to take a shot on the stock. Analysts do expect the stock to recover. The average 18-month price target on Exxon is $93.29, says S&P Capital IQ, which is 16% higher than where the stock closed Friday. Earnings are also expected to start bouncing back in 2016. Analysts see Exxon reporting an adjusted profit a share in 2016 of $5.30 a share, up 36% from 2015.

This recovery could be slow. Exxon earned $7.36 a share on an adjusted basis in 2014 - and the company isn't expected to see profit regain that level until well after 2019. This perhaps explains why the average analyst rates Exxon a "hold." Here's a better idea: Own the Standard & Poor's 500. Energy is 8% of the investment.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.