Thanks to the Russia-Ukraine war, the energy sector has been red hot this year. While OPEC recently cut its 2022 demand growth forecast for oil for a second straight month, trade and production disruptions due to the Russia-Ukraine war are expected to keep prices above $100 per barrel this year. Also, the geopolitical crisis has pushed gas prices to record highs, and the worst is yet to come, according to experts.
Given the industry’s profitability prospects, fundamentally sound and high dividend-yielding stocks could be ideal bets now. Investors’ interest in energy stocks is evident in the Energy Select Sector SPDR ETF’s (XLE) 35.7% returns over the past six months.
TotalEnergies SE (TTE)
Headquartered in Courbevoie, France, TTE operates worldwide as an integrated oil and gas company. The company operates through four segments: Integrated Gas, Renewables & Power; Exploration & Production; Refining & Chemicals; and Marketing & Services.
On April 28, 2022, Chairman and CEO Patrick Pouyanné said, “TotalEnergies launched with its partners the Cameron LNG expansion project that will contribute to Europe’s security of supply. In particular, TotalEnergies strengthened its offshore wind portfolio by obtaining concessions to develop 3 GW in the United States and 2 GW in Scotland.”
TTE has been paying dividends for 10 consecutive years. Its dividend payouts have grown at a 2.6% CAGR in the past five years. Its current dividend translates to a 5.85% yield, while its four-year average yield is 6.51%.
TTE’s adjusted revenues came in at $63.94 billion for the first quarter, ended March 31, 2022, up 65.4% year-over-year. Its adjusted, consolidated net income came in at $9.05 billion, up 195.7% year-over-year. Also, its adjusted EBITDA was $17.42 billion, up 113.3% year-over-year.
TTE’s revenue is expected to increase 21.1% to $261.07 billion in 2023. Its EPS is estimated to increase 38% per annum over the next five years. It surpassed EPS estimates in three of the trailing four quarters. And over the past nine months, the stock has gained 14.6% in price to close yesterday’s trading session at $51.69.
TTE’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to a Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has an A grade for Momentum and a B grade for Growth and Sentiment. It is ranked #3 of 98 stocks in the B-rated Energy – Oil & Gas industry. Click here to see the additional ratings for TTE (Value, Stability, and Quality).
China Petroleum & Chemical Corporation (SNP)
Headquartered in Beijing, China, SNP, an energy and chemical company, engages in the oil and gas and chemical operations in Mainland China, Singapore, and internationally. It operates through five segments: Exploration and Production; Refining; Marketing and Distribution; Chemicals; and Corporate and Others.
SNP has been paying dividends for 11 consecutive years. In the past five years, SNP’s dividend payouts have grown at a 16.3% CAGR. Its current dividend translates to a 20.02% yield, while its four-year average yield is 9.38%.
SNP’s operating income has increased 33.8% year-over-year to RMB771.39 billion ($113.63 billion) for the first quarter, ended March 31, 2022. Its net profit came in at RMB22.45 billion ($3.31 billion), up 27% year-over-year, while its EPS was RMB0.187, up 24.7% year-over-year.
Analysts expect SNP’s revenue to be $562.70 billion in 2022, representing a 32.4% year-over-year rise. It surpassed the EPS estimates in each of the four trailing quarters. And over the past nine months, the stock has gained 3.9% in price to close yesterday’s session at $48.79.
It is no surprise that SNP has an overall B rating, which equates to a Buy in our POWR Rating system.
It has an A grade for Value and Momentum and a B grade for Stability. It is ranked #26 in the Energy – Oil & Gas industry. Click here to see the additional POWR Ratings for Growth, Sentiment, and Quality for SNP.
Eni S.p.A. (E)
Headquartered in Rome, Italy, E explores, develops, and produces crude oil and natural gas. It operates through Exploration & Production; Global Gas & LNG Portfolio; Refining & Marketing and Chemicals; Plenitude and Power; and Corporate and Other activities segments.
E has been paying dividends for 12 consecutive years. Its current dividend translates to a 6.70% yield, while its four-year average yield is 6.18%.
For the first quarter, ended March 31, 2022, E’s total revenues were €32.49 billion ($33.73 billion), up 119.6% year-over-year. Its adjusted operating profit increased 293% year-over-year to €5.19 billion ($5.49 billion). Furthermore, its adjusted net profit came in at €3.27 billion ($3.46 billion), up 1,111.1% year-over-year, while its EPS came in at €0.91, up 1,037.5% year-over-year.
E’s revenue is expected to increase 24.3% year-over-year to $107.78 billion for its fiscal period, ending Dec. 31, 2022. Its EPS is estimated to increase 19.5% per annum for the next five years. Over the past nine months, the stock has gained 13% in price to close yesterday’s trading session at $27.92.
It is no surprise that E has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Momentum and a B grade for Growth, Value, Stability, Sentiment, and Quality.
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TTE shares were trading at $53.29 per share on Friday afternoon, up $1.60 (+3.10%). Year-to-date, TTE has gained 8.89%, versus a -15.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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