• 1 hour Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 3 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 4 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
Alt Text

Has The Bear Market In Oil Finally Ended?

Recent data provides reasons to…

Alt Text

How OPEC Continues To Cheat On Its Own Deal

OPEC oil production has once…

Alt Text

OPEC Looks To Permanently Expand The Cartel

OPEC Secretary General Mohamed Barkindo…

Michael McDonald

Michael McDonald

Michael is an assistant professor of finance and a frequent consultant to companies regarding capital structure decisions and investments. He holds a PhD in finance…

More Info

Top 4 Oil Companies For Dividend Investors

Top 4 Oil Companies For Dividend Investors

Investing in the energy industry right now can be scary. On the one hand, oil prices have been extremely volatile and look likely to stay that way. On the other hand, while clean energy, especially wind power, is growing rapidly, valuations are astronomical and, for income-focused investors there are few good options.

With that in mind, investors looking for income in energy have little choice but to turn to the safest conventional energy play available; oil majors. Companies like ExxonMobil and Royal Dutch Shell have been around for decades, so regardless of what happens to oil prices, these firms have the capacity to deal with virtually any scenario. Profits will, of course, suffer if oil prices stay below $50 a barrel for years, but unlike smaller players, ExxonMobil is not going to go bankrupt. Related: Oil Markets Can’t Ignore The Fundamentals Forever

So which oil majors are worth looking at if you’re focused on dividends? A look through the US publicly traded majors with the highest dividend yields reveals some intriguing opportunities.

Topping the list of the highest dividend yield right now is Italian oil giant ENI SpA (NYSE: E). It carries a market cap of nearly $70 billion and a dividend yield over the last 12 months of nearly 6.5%. Those dividends have been volatile over the last decade, but the company has been good about tying its dividends to oil prices, so if oil prices recover, investors in ENI would reap the rewards. ENI became the first major to cut its dividend earlier this year, but it still offers attractive payouts for investors. Related: Shell Approval May Trigger Resource Race In The Arctic

Next on the list is Royal Dutch Shell. The company trades in the US under two different ADRs (American Depositary Receipt), RDS.A and RDS.B. Both pay a dividend yield in excess of 6%. ENI may pay a higher dividend, but it doesn’t have the name recognition or size of the giant that is Royal Dutch Shell. Shell has also been a little bit better about improving its operational efficiency over the last decade, and it shows in their payout history which has improved for the last four years running now.

Coming in third on the list of top yielding oil majors is French giant, Total which trades in the US under ticker symbol TOT. The company’s dividend payout has been stagnant for a few years, but on the positive side, the company is vertically integrated upstream and downstream which should enable it to take advantage of margin growth in various spots of the supply chain. For example, the firm is likely to see higher European refining margins over the next year, which should offset losses from upstream production. The French refining operations have encountered some labor strife, but the company appears to be moving in the right direction on cost and efficiency in that unit. Total is targeting $10 billion in free cash flow by 2017 which should bolster the dividend going forward. Related: Oil Futures Prices Divorced From Physical Markets For Now

Finally, with a dividend of nearly 4.5%, ConocoPhillips (COP) ranks as the number four highest yielding oil major. One nice feature about COP is that the firm has consistently increased its dividend year after year for the better part of a decade now. In 2005, ConocoPhillips paid out $1.18 a share while this year it looks likely to pay out $2.92 a share. The firm has divested billions in assets over the last few years (in hindsight a very savvy choice on the part of management), and its current portfolio is heavy on unconventional and international assets. Between this portfolio, the firm’s strong balance sheet, and the fact that ConocoPhillips will likely be one of the only oil majors this year with positive free cash flow, the dividend yield is just the icing on a very attractive cake.

By Michael McDonald of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News