Oil Stocks Can Fuel Retirement Fund $BP $RDS/A $E $TOT $COP $XOM
Retirement is important to all of us, and everyone has their own strategy. Here are a few companies that might work for your retirement fund. One thing to remember is the oil and gas industry isn’t going away any time soon and these are a few that pay you for your investment.
In a retirement account, it is important to create current income, while keeping opportunities for growth in your portfolio. One of the best combinations of growth and income can be found in the oil companies. In this sector, there are many great companies, so how does an investor decide which is the best investment over the long term?
There are many great oil companies to choose from; however we will limit our selections to those that pay high dividends (above 4.5%). This is why Exxon Mobil (XOM), while one of the most widely-held stocks in the world, is not included in this analysis. High dividend stocks can be great investments both before and after retirement. A retiree could obviously collect the dividends as a stream of income, and a pre-retirement investor has the ability to reinvest all dividends free of commission, using a DRIP (Dividend Reinvestment Plan) offered by most brokerages.
Our candidates in no particular order are:
Conoco Phillips (COP) – The only U.S.-based company on our list, Conoco explores for, produces, transports and markets crude oil, bitumen, natural gas, LNG and natural gas liquids all over the world. Conoco is one of the largest independent oil and gas exploration and production companies in the world, with a market capitalization of around $69.7 billion. Currently, COP trades at 11.1 times TTM earnings. COP has done very well over the past 20 years, with an 8.5% average annual gain in share price and dividend yields. COP is currently yielding around 4.6%.
Total (TOT) – Based in Paris, France, Total has operations in 150 countries and is engaged in all aspects of the petroleum industry. Total is one of the largest publicly traded oil companies in the world, with a market cap around $113.4 billion, and currently trades at only 7.4 times TTM earnings. TOT has rewarded its investors with an 8% average gain in share price over the past two decades, and has given generous 10.2% annual dividend increases over that time period. Total is currently paying a 4.88% yield.
Eni SpA (E) – An Italian multinational oil and gas company, Eni is the highest yielder in this list, currently paying 5.94% annually. Eni has a $73.4 billion market cap and trades at 9.28 times TTM earnings. Since going public in 1996, Eni has increased its share value by an average of 8% annually, and has raised its dividend by 10.3% per year.
Royal Dutch Shell (RDS.A) – headquartered in the Netherlands, Royal Dutch Shell has been in operation since 1892. One of the largest oil and gas companies in the world, RDS operates in over 100 countries and has a market cap of $130.6 billion, currently trading at only 8.27 times earnings. Over the past 20 years, RDS has underperformed its peers, gaining 6.7% in the average year and raising its dividend by 5.8%.
BP (BP) – Founded in 1909 in Iran, BP is now a London-based oil and gas company, and the largest in this comparison, with a market cap of $133.9 billion, and trading at 7.83 times earnings. BP, which still has not fully recovered from the infamous Deepwater Horizon disaster, has still managed to average a 7.4% gain over the past 20 years. BP only started paying regular dividends in 2000, starting at 33 cents quarterly, and raising them consistently to 84 cents in 2010, before being forced to cut dividends in half after the disaster.
This is not an offer to buy or sell securities. Oil investment carries with it very high risks. The information contained within this site has not been nor will it be verified by Envestor First and is subject to change at any time. We are not a United States Securities Dealer or Broker or United States Investment Adviser. Do your own due diligence and consult with a licensed professional before making any investment decisions. Please read our full disclaimer before making any decisions.