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3 Top Oil Stocks For Your ISA: BP plc, Premier Oil PLC And Genel Energy PLC

BP

With the price of oil tumbling to a level that few investors or commentators anticipated, earnings at oil companies such as BP (LSE: BP) (NYSE: BP.US) have been on the slide. For example, the oil major posted an 83% decline in its bottom line in 2014, which is clearly very disappointing for its investors.

However, investing in BP at the present time could be a very shrewd move. That’s because it is forecast to bounce back extremely strongly over the next two years, with earnings growth of 71% in the current year, and 45% next year being anticipated. And, even though BP trades on a price to earnings (P/E) ratio of 18.9, its stunning growth prospects mean that it has a price to earnings growth (PEG) ratio of just 0.3, which indicates that its share price is set to rise considerably over the medium term.

Premier Oil

It’s also been a disappointing period for investors in Premier Oil (LSE: PMO), with the company reporting a loss last year as impairments took their toll on its bottom line. And, while further impairments are a distinct possibility with the oil price remaining relatively low, Premier Oil is expected to become more efficient and highly profitable again in each of the next two years.

In fact, pretax profit is anticipated to hit as much as £97m next year which, although far less than the £239m reported in 2012, would represent a big step in the right direction. And, with Premier Oil trading on a forward P/E ratio of 14.4, it appears to offer good value for money and, therefore, could be due for a period of improved share price performance moving forward.

Genel

Having recently completed a $230m bond sale, Genel’s (LSE: GENL) finances appear to be in an improved state, which should afford it greater flexibility regarding its operations in Kurdistan, and also provide investors in the company with greater confidence regarding its future operations.

Clearly, there is a considerable risk from operating in Kurdistan at the present time, with the region having a relatively unstable political outlook. However, Genel’s valuation appears to adequately include a discount for such concerns, with the company trading on a PEG ratio of just 0.2. As such, and while its future share price movements could be volatile if negative news flow does present itself, its long term outlook appears to be relatively positive right now.

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Peter Stephens owns shares of BP. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.