Pretty much across the board, ExxonMobil has an advantage over its peers.The real value proposition that Big Oil companies provide to their shareholders is the fact that they can generate tons of excess cash after their capital expenditures to pay generous dividends and buy back shares to boost stock prices.Their most recent earnings have taken a hit, but none have become immensely financially strained during this downturn and stock valuations across Big Oil are dirt cheap.
Adding energy stocks may not be the first thing on your list of things today, but getting a Big Oil stock at monstrous yields could pay off in the long run.Many energy stocks have been pummeled as plunging crude oil prices ate up profit margins across the sector.
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Is this the riskiest oil stock in the world? - USA TODAYCertain projects have very short lifespans (think shale wells), while others can be multi-decade cash generators (think oil sands and LNG facilities).Articles, Analysis and Market Intelligence on the Oil, Gas, Petroleum and Energy Industry.
These seven companies can prosper even in a world of cheap oil. See Also: Best Big Oil Stocks for Safe Dividends.Valuation So far we have looked at what we are buying, but now we need to ask the question about price.Even with the ability to fund capital projects with cash flow, thougfh Royal Dutch Shell has been the most aggressive sellers of non-core assets.Once all of its current developments are brought on line, it will represent close to 600,000 barrels per day of production for Shell.
Oil prices surged about 4 percent on Thursday after U.S. inventory data showed a surprisingly large drawdown in crude stocks as imports into the U.S. Gulf.So simply maintaining that base is going to be more of a daunting challenge.Note: This article was originally published May 18, 2015 and updated January 13, 2016.You can follow him at Fool.com under the handle TMFDirtyBird, on.
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Best Stocks for Today - number-10.netAs crude oil prices continue their descent to almost their lowest point since 2009, many value investors have contemplated whether oil stocks offer a.The easy way of looking at return on equity is to divide earnings from continuing operations by total equity in the company.
Based on how share prices have performed over the past year or so, some might question if this still holds true.Click to see more information on Crude Oil ETFs including historical performance, dividends, holdings, expense ratios, technicals and more.So any gains in cash flows that these companies were slated to receive as spending declined and new projects came online, they were almost immediately evaporated by weak oil prices.Operational cash flow as a percent of capital expenditure (less than 100% means more cash spent than generated).For the past few years, BP has seemed a bit like a rudderless company.Crude stocks cycle back and forth between drawdown and surplus.
US stock indexes mixed in early trading; oil slidesOnce they are up and running, the assumption is the company will be able to wind down some of its capital spending and bring that cash generation versus spending issue back into balance.However, toward the end of the year, some relief came into sight.
Even if prices remain at these levels for a while, it could give investors a long window for accumulating a position in one or two of these companies that could reap huge rewards several years down the road.When you also add the BG Group into the Shell portfolio, it becomes even more clear that Shell is banking heavily on LNG and deepwater.Compared to the broader market, just about every one of these companies looks like a screaming buy.