The oil industry is coming to an end after one of its best years. Oil prices plummeted as the global economy recovered from the epidemic, with producers keeping supply closed. These strong market conditions must continue in 2022 և after that, as the world needs oil, despite its move to cleaner energy sources.
Against this background, we asked some of our Fool.com investors to have their favorite oil reserves in 2022 and beyond. That’s why they chose TotalEnergies: (NYSE: TTE), ConocoPhillips: (NYSE: COP), և: Devon Energy: (NYSE: DVN).
Ruben Greg Brewer (TotalEnergies): If you’re looking for oil, you can use the name Pure Game Search և Production. Or, if you’re a little more conservative, you’ll probably choose an integrated energy company that has assets ranging from drilling (upstream) to recycling և chemicals (downstairs). I’m a conservative, so this is my preference. But the story here is more as some big oil companies like ExxonMobil: (NYSE: XOM) և: Shron (NYSE: CVX) stick to a layer of oil while others, like my darling, TotalEnergies: (NYSE: TTE), are slowly moving their portfolios to clean energy.
TotalEnergies is not alone. peers: Royal Dutch Shell: (NYSE: RDS.B) և: BP: (NYSE: BP) they also use their oil profits to finance clean energy investments. However, of these three, only TotalEnergies goes this route without reducing dividends. And he does not give up oil, natural gas, with the aim of developing his energy business (transition to cleaner burning natural gas), the business of “electrons” at the same time. It allows me to have a growing energy business ող a growing renewable energy business with a single investment.
At the same time, I am accumulating industry-leading dividend yields of 6%, while this diversified oil company is reasonably adapting to the world around it. It’s a bit of an option, but the one that allows me to sleep well at night in an area that tends to be in the best of times of instability is like an existential crisis today.
Return unexpected income to investors
Matt DiLalo (ConocoPhillips): Oil giant ConocoPhillips has taken several steps in recent years to cut costs to generate more cash flow. His last step was achievement Shell:assets in the Perm Basin to increase its scale in that cheap oil basin. This strategy gives investors great dividends.
ConocoPhillips expects to return $ 7 billion to shareholders in 2022. This is 16% more than last year. It has established a three-tier program to return money to investors.
- Quarterly base dividend: ConocoPhillips has added its quarter payment of dividends 7% to $ 0.46 per share at the end of last year. At the current price of shares Dividend yield is 2.4%, almost double that of 2010 S&P 500:. At current rates, the company will pay $ 2.4 billion in dividends this year.
- Redemptions of shares. ConocoPhillips expects to repurchase $ 3.5 billion worth of shares this year, and $ 1 billion will be financed by selling its remaining shares. Cenovus Energy:.
- Variable cash return. ConocoPhillips plans to distribute about $ 1 billion in additional cash to shareholders through variable cash returns. It expects to make these payments on a quarterly basis, with the former set at $ 0.20 per share.
Overall, ConocoPhillips expects to return more than 30% of its projected cash flow to shareholders in 2022, and expects low single-digit output growth in 2022. top level balance. Focusing on increasing cash flow նելու returning to shareholders is why ConocoPhillips is one of my favorite oil stocks to have in the coming years.
Overcoming industry dividends
Neha Chamaria (Devon Energy): Devon Energy started paying the first fixed plus variable dividends in the oil industry in 2021. The company has adopted a policy of supplementing the fixed dividend with a special dividend equivalent. The amount is up to 50% of the cash flow left over from capital expenditures հետո after fixed dividends have been paid in any quarter. The policy of those dividends greatly helped to stimulate the shareholders’ incomes last year. The company paid $ 1.97 in dividends per share in 2021, up from just $ 0.68 per share in 2019.
Shareholders can continue to expect strong returns from Devon Energy this year. The point is that oil prices remain stable for the time being due to a number of factors, including the disruption of supplies from Libya, as the country has repaired major pipelines and declared a force majeure for oil exports. In addition, OPEC remains committed to its plan to gradually increase oil production on a monthly basis. This is good news for Devon Energy shareholders, as the company’s cash flows and, consequently, variable dividends depend on oil prices.
Even if oil prices fall, Devon Energy is on a solid footing, beginning in 2021 with the merger of all WPX Energy shares, then using the rest of the year to pay off its debt to consolidate its balance sheet. With West Texas Intermediate (WTI) oil priced at $ 75 a barrel, Devon Energy predicts that its cash flow will grow by more than 35% by 2022. At this rate, its total dividend this year could increase by almost 80% in 2021. huge, և when combined with a recent oil stock buyback plan, can turn into a solid return for shareholders.
This article presents the opinion of a writer who may disagree with the position of the “official” recommendations of Motley Fool Premium Consulting. We are motley! Questioning an investment thesis, even our own, helps all of us think critically about investing, making decisions that help us become smarter, happier, and richer.