Ten Oil Stocks To Consider

Posted by on

Oil prices are rising again. Brent prices for May delivery closed at $85.42 on Friday. Year-to-date prices have gone up by 12%. Higher oil prices has lead to higher gasoline prices at the pump. Earlier this month, OPEC announced the extension of production cuts through the end of this year. Geopolitical risks have not subsided and will continue to exist for the foreseeable future. Higher oil prices are generally beneficial to oil companies. Hence investors looking to gain exposure to the oil industry can consider adding oil stocks in a phased manner when equity markets turn volatile.

Ten large oil companies that investors can consider for further research are listed below with their current dividend yields:

1.Company: Exxon Mobil Corp (XOM)
Current Dividend Yield: 3.42%
Country: USA

2.Company: Shell PLC (SHEL)
Current Dividend Yield: 4.8%
Country: UK

3.Company: Chevron Corp (CVX)
Current Dividend Yield: 4.19%
Country: USA

4.Company: BP PLC (BP)
Current Dividend Yield: 4.55%
Country: UK

5.Company: TotalEnergies SE (TTE)
Current Dividend Yield: 4.7%
Country: France

6.Company: Eni SpA (E)
Current Dividend Yield: 6.28%
Country: Italy

7.Company: Equinor ASA (EQNR)
Current Dividend Yield: 13.71%
Country: Norway

8.Company: Ecopetrol SA (EC)
Current Dividend Yield: 14.0%
Country: Colombia

9.Company: ConocoPhillips (COP)
Current Dividend Yield: 3.48%
Country: USA

10.Company: Phillips 66(PSX)
Current Dividend Yield: 2.64%
Country: USA

Notes:

a) Dividend yields noted above are as of Mar 15, 2014. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.

b)For foreign companies listed above, dividend withholding taxes will reduce the dividend yields quoted.

Disclosure: Long EC

The Life of a Mine: Infographic

Posted by on

Mining is one of the important industries that is necessary of the functioning of the global economy. Though establishing a mine and running it takes years and years, Ontario Mining Association notes that mining is a temporary land use activity. Though land can be returned to its natural state after mining it is not that simple as it depends on the type of mining done and regulations and so forth. The following infographic shows some of the many stages in the life of a mine:

Click to enlarge

Source: Ontario Mining Association

Related stock lists:

Gold and Bitcoin Prices Are Soaring This Year

Posted by on

Gold and Bitcoin prices have been soaring so far this year. Investors tend to flock to these assets during times of market distress or if they fear a blank swan event. Gold prices have shot up over 5.70% year-to-date and closed at $2,190.50 today. Digital currency Bitcoin has rocketed by about 72% and crossed $72,160 today. In the past 1 year Bitcoin is up over 187%.

David P Goldman published an article recently in Asia Times discussing Gold and Bitcoin. According to him, the rise of these two assets show the risk of black swan event is rising. From the piece:

Gold continued to break price records on Friday, trading at US$2,183 an ounce at mid-afternoon, following a more dramatic rally in Bitcoin. Gold led Bitcoin in 2020 and 2021, during the Covid crisis. This time Bitcoin clearly led gold, suggesting that investors have more confidence in the high-tech alternative to the dollar.

Key to understanding how gold gauges geopolitical risk is the longstanding relationship between Treasury Inflation Protected Securities (TIPS) and the precious metal. Both are hedges against unexpected inflation or debasement of the dollar.

Source: Gold, Bitcoin surges show black swan risk rising, Asia Times

As market valuations are at elevated levels investors may want to be cautious. Some parts of the market are in the bubble territory as well.

Disclosure: No positions

Clarifications on Ecopetrol’s Upcoming 2024 Dividends

Posted by on

Colombian oil major Ecopetrol (EC)announced 4th quarter, 2023 earnings late last month. The company also announced their dividend distribution proposal for payment to shareholders in 2024. The Ecopetrol dividend 2024 dividend will be lower than last year’s dividend. The profits in 4Q were down 38% as oil prices declined according to a new report by Reuters.

From the report:

Colombia’s majority state-owned oil company Ecopetrol (ECO.CN), opens new tab on Thursday reported a fourth-quarter net profit that fell 38%from a year earlier, to just over $1.07 billion, with executives citing lower oil prices for the dip.

Net profit slid to 4.23 trillion pesos, from 6.85 trillion in the final quarter of 2022.

“The fact that we had a reduction in market price of $17 per barrel impacted net profit,” said CEO Ricardo Roa at a press conference after the release of results.

Roa said the company would hold to its previously announced plan to invest between 23 trillion and 27 trillion pesos, up to $6.8 billion, this year.

“The investment plan for 2024 plans to maintain the historic levels of execution that we reached in 2023, with an emphasis in the energy transition,” Roa said.

Source: Colombia’s Ecopetrol Q4 profit down 38% as oil prices drop, Reuters

Ecopetrol announced its plan to pay the following dividend amounts this year:

Ecopetrol Dividend 2024:

Total ordinary dividend payable per share – 278 COP

Total extraordinary dividend payable per share – 34 COP

Total dividend payable – 312 COP

Note: COP is Colombian Pesos

The payout proposal as above matches the firm’s policy of 60% payout ratio.

1.So how much an Ecopetrol ADR shareholder will receive in dividends?

One ADR = 20 Ordinary Shares. Hence each ADR will be paid 312×20 = 6240 COP or US $1.60 based on the current exchange rate. The actual rate received will vary based on the exchange rate on the date of payment.

2.What is the dividend yield then?

The dividend yield based on Friday’s closing price of $10.52 and a dividend amount of $1.59 is 15.11%.

3a.When will this dividend be paid?

The full dividend amount will NOT be paid in one shot. Instead it will paid in 3 equal installments on April 25, September 26 and December 19, 2024.

Update (3/25/24): Ecopetrol 2024 Dividend Payout Dates

Instead it will be paid in two equal installments as per the press release published after the annual shareholders meeting last Friday. The dividends will be paid on April 3, 2024 and June 26, 2024. So on those 2 dates a dividend amount of $0.80 each will be paid.

Source: Distribution of Dividends corresponding to Fiscal Year 2023, Yahoo Finance

3b.So what are the Ex-Dividend Dates in 2024?

The Ex-Dividend dates for dividend payments in 2024 is NOT confirmed yet. It will most likely be known next week when the results of the annual shareholders meeting is published.

4.Is this dividend lower or higher than in 2023?

This payment is indeed much lower than the amount paid in 2023 of $2.81 per ADR. However this year’s payment is still not bad since the yield comes to over 15% approximately and it included a special payout as well.

5.Is there any dividend withholding amount involved?

Yes. The exact amount or percentage will be determined at the time of payment. Last year it was negligible at 0.0005%

6. Is this dividend confirmed?

Yes the board of directors has already approved the above distribution proposal. Shareholders will be presented the plan on the general meeting on the 22nd for approval.

7.Is the current share price attractive?

That depends on an investor. While in the short-term the price may decline further, it is good for the long-term investor. The dividend payment cannot be beat and moreover should oil prices rise again the firm’s earnings would soar.

8.Is Ecopetrol a consistent dividend payer?

Absolutely. The company has paid a dividend every year since going public in the US in 2009. Though the amount varied each year based on oil prices and other factors, the company has never ignored shareholder by suspending dividends.

Update (3/30/24):

9.What is the Dividend Withholding Tax Rate for the 2024 Dividends?

0%. There will be no dividend withholding taxes charged for the dividend payments in 2024.

Disclosure: Long EC