|Bid||0.00 x 1000|
|Ask||77.75 x 1000|
|Day's Range||76.75 - 77.76|
|52 Week Range||64.65 - 87.36|
|Beta (3Y Monthly)||0.98|
|PE Ratio (TTM)||15.92|
|Earnings Date||Apr 25, 2019 - Apr 29, 2019|
|Forward Dividend & Yield||3.28 (4.30%)|
|1y Target Est||84.19|
Exxon, Tanger, and General Mills are working through tough spots, but investors willing to think long term can pick up their fat yields now.
The U.S. shale oil boom is about to get a lot bigger. Oil pipeline projects are pulling big oil companies full force into wildcatters’ world. Here’s why that matters.
The oil and gas industry includes companies involved in the exploration, extraction, refining, transporting and marketing of oil and gas products. The oil and gas sector started 2018 off strong, coinciding with a rise in crude oil prices from around $50 to $70 per barrel.
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Integrated energy stocks’ valuation Previously, we reviewed the changes in integrated energy stocks’ short interest. In this part, we’ll compare forward
Asian spot prices for liquefied natural gas (LNG) continued their downward spiral this week, hitting a 17-month low as the market moved further away from the peak winter-demand period and inventories remained high in the region. Spot prices for March delivery to Asia (LNG-AS) fell to $6.50 per million British thermal units (mmBtu) this week, down 20 cents from the previous week to their lowest since Sept. 8, 2017, trade sources said. Demand in China remained tepid as many factories there were still shut for Lunar New Year celebrations, trade sources said.
Companies such as Exxon Mobil and Chevron may be more focused on capital returns than growth. That is good news for income investors.
Saudi Arabia and U.S. oil majors, most based in Texas, have had a symbiotic economic relationship ever since oil was found in Dhahran in 1938.The oil superpowers and some oil stocks are riding high again, as Saudi Arabia launches a "shock and awe" campaign to raise oil prices.Goldman Sachs now expects prices for Brent North Sea oil, the world standard, to rise to $67.50 per barrel this spring, with OPEC production having already been cut by 800,000 barrels per day over the last few months.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Texas Shale BoomOne result is that a shale oil boom that re-ignited in Texas last year is going to accelerate into 2019.The question is who will profit.The Texas Independent Producers and Royalty Owners Association (TIPRO) reports that the state's production in 2018 came to 1.54 billion barrels, up from 1.03 billion in 2017 and 20% ahead of the previous record set in 1973. This helped make the U.S. the world's largest oil producer, ahead of Russia and Saudi Arabia. * 10 'Buy-and-Hold' Stocks to Own Forever The boom in production is extending into 2019, with the Energy Information Agency reporting 11.9 million U.S. barrels per day came up the week of Feb. 8, compared with 10.25 million barrels during the same week a year ago. Wrong Oil?Oil stocks like Chevron (NYSE:CVX), which had been on a never-ending campaign of belt-tightening since the last bust in 2014, are now poised to reap the rewards.The reason, as I noted in writing about Exxon Mobil (NYSE:XOM) earnings on Feb. 1, is an infrastructure disconnect. There's not enough pipeline capacity for all this new shale production, and U.S. refineries have long been tuned to heavier grades of imported crude anyway.So while Permian independents like Concho Resources (NYSE:CXO), which produced 310,000 barrels of oil equivalent per day during the fourth quarter, expect to see prices rising from the $53.77 level they were at Feb. 14, they're not rising quickly as Kinder Morgan (NYSE:KMI) races to add pipeline capacity. Note that while it's now legal for the U.S. to export crude oil, the spread between WTI and Brent prices is over $10 per barrel.The biggest producers of "sour" or "heavy" crude, Venezuela and Iran, are subject to U.S. sanctions, while gasoline "crack spreads" -- the margin between the cost of crude and what refined products bring -- continue to fall. Refiners are now short the "heavy" crude they're accustomed to, while U.S. fracking companies deliver a bumper crop of "light" crude to the market.Oil that is easiest to refine and closest to the market, as on the U.S. West Coast, is now priced near $62 per barrel, while oil that can't reach the market, like Canadian Crude, is still selling at under $40 per barrel.The winners in this market would thus seem to be oil stocks that can trade oil, ship oil and arbitrage the price. But that's not the way the stock market sees it. The Bottom Line on Oil StocksExxon Mobil stock hit its high for the decade in early 2014, and is currently 17% below that figure, even with a rally that began in December. During this decade, Exxon has become a dividend stock, increasing the dividend in five years from 63 cents per share to 82 cents, yielding 4.3% at the company's price of about $76 per share on Feb. 14.Meanwhile, Concho Resources, which pays no dividend, has stock worth 23% more than five years ago. Since the start of 2019 Concho is up 16% while Exxon is up only 11%.This should be Exxon's market, but it's producers like Concho that are currently getting the love from investors due to higher production.I may be wrong, but it looks like investors are making a mistake.Dana Blankenhorn is a financial and technology journalist. He is the author of a new mystery thriller, The Reluctant Detective Finds Her Family, available now at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing, he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post This Are the Kind of Oil Stocks You Should Watch Right Now appeared first on InvestorPlace.
Shell Strengthened Last Year: Where’s It Headed?Shell’s growing upstream portfolioRoyal Dutch Shell’s (RDS.A) upstream portfolio comprises deepwater, integrated gas, conventional oil and gas, and shale assets. In these categories, Shell’s
Did you know that stock buybacks were illegal until 1982? It's true. The SEC, operating under the Reagan Republicans, passed rule 10b-18, which made stock buybacks legal. Up until the passing of this rule, the Securities Exchange Act of 1934 considered large-scale share repurchases a form of stock manipulation. The 1982 rule provided "safe harbor" protection as long as a company bought back no more than 25% of its average daily volume over the previous four weeks and didn't buy its stock at the beginning or end of the day's trading. The SEC Commissioners argued at the time that the rule would encourage higher stock prices thereby benefiting investors across the board. InvestorPlace - Stock Market News, Stock Advice & Trading TipsCare to guess who the SEC Chairman was in 1982? John Shad. John Shad was a former executive with E.F. Hutton. It seems odd that someone who worked for a company that directly benefited from the rule change -- higher prices equals higher commissions -- would be in charge of the agency created to protect investors. In hindsight, it seems like a massive conflict of interest… but I digress.The reality is that stock buybacks have helped the wealthiest 1% get even richer over the past 36 years. In 1982, according to the Economic Policy Institute, the average CEO earned 50 times the average production worker. Today, the CEO Pay Ratio's increased to 144 times the average worker with most of the gains a result of stock options and awards. Suggesting stock buybacks ought to be illegal isn't a crazy notion. Here are seven reasons why: Stock Buybacks Reward a Lack of Creativity and InnovationBy mid-December of 2018 -- following the corporate tax cut that was supposed to help the middle class -- America's public companies had announced $1.1 trillion in stock buybacks with $800 billion already repurchased with only two weeks left in 2018. A record year by any standard. On the one hand, buybacks of this size make sense in a year that saw many stocks lose ground. On the other, 2018 was the first year of negative returns for the S&P 500 since 2008, making the latest bull market one of the longest in history. In the eyes of many, stocks are overvalued, despite their retreat in 2018.Companies like Apple (NASDAQ:AAPL) ought to have better things to do with their cash than buying back billions of dollars in stock ($22.8 billion in Q1 2018 alone). It stifles creativity and innovation, something Apple's going to need if it wants to keep growing. "I find it absolutely mind-numbing that a company like Apple can sit on $260 billion of cash," Morgan Creek Capital CEO Mark Yusko told CNN recently. "You're telling me that all these genius people can't think of one intelligent thing to do with that capital?I'm a fan of Tim Cook and Apple, but stock buybacks are not the answer to the company's slowing innovation. Stock Buybacks Are Hurtful to the U.S. EconomyThis argument is a rather circuitous one so bear with me. CNN recently reported that America's total debt is nearly $22 trillion, an average of $67,000 per person. That's right; split between all U.S. citizens, you'd owe $67,000 for your share of America's debt. In 2019, America's bill for the interest on that debt is $383 billion; by 2025 it's projected to hit $928 billion or about the same amount as corporate stock buybacks in 2018. Imagine if the dollars directed to share repurchases were redirected to paying down the national debt. At the current pace of stock buybacks, the debt problem could be eliminated in 22 years. But of course, that wouldn't help the wealthiest 1%.Consider this: Many economists argued that the Trump tax cuts would worsen the debt situation and they were right. The Congressional Budget Office predicted that the Trump tax cuts would add $1.9 trillion in principal and interest to the deficit by 2027. Since Trump's become President, the national debt's increased by more than $2 trillion. Thus, the president and Congress face a difficult decision. Increase taxes, cut spending or do a combination of both. Do nothing, and the deficit continues to increase, and the U.S. dollar risks becoming irrelevant on a global scale as its creditworthiness crumbles.Trump's plan was simple: Cut corporate taxes and the savings will be reinvested. The $1.1 trillion in stock buybacks in 2018 suggests that didn't happen. God help the common man if we go into recession in the next two years because there will be nothing available to reignite the economy. The cupboards will be bare. Stock Buybacks Add to DebtloadThe previous reason why stock buybacks ought to be illegal had to do with the federal government's mishandling of an economy on the rise. I never thought the corporate tax cuts were a good idea. "America's crumbling infrastructure isn't going to be fixed when the federal government's revenues are going the wrong way. President Donald Trump promised an infrastructure plan, but with lower revenues expected over the next decade, it will be tough for him to deliver," I wrote in December 2017. "And don't for a minute expect private businesses to jump into the fight to save the day with their new-found wealth."They haven't. And won't. So, here we have a federal government drowning in debt, encouraging public companies to do the same through stock buybacks. Unfortunately, as bond guru Jeffrey Gundlach suggests, increasing stock buybacks reduces the solidity of a company's balance sheet. "So, the balance sheets of corporations are balanced on ever-dwindling equities as they buy back shares and increase their leverage ratios. And that's not good," Gundlach stated in January. "Strong balance sheets are going to be the way to survive during the zigzag of 2019."In Gundlach's estimation, strong balance sheets are far more critical than strong earnings.With 62% of investment grade debt maturing over the next five years, there are a lot of companies that are going to wish they didn't buy back so much stock. Stock Buybacks Reduce Capital SpendingAll businesses have one cash flow bucket. Cash goes in; cash goes out, the difference is the capital it can allocate for uses other than keeping the company running. These uses include debt repayment, dividends, stock buybacks, acquisitions, and investing in the future. The Trump corporate tax cut was intended to put more money in corporate coffers so they could invest in the future creating more jobs. While the unemployment rate is healthier than it's ever been, it's unlikely that it was the result of increased capital spending. In the last two years of the Obama administration, five million jobs were created while 4.8 million were created in the first two years of Trump's presidency, suggesting that almost any economic strategy would have worked for the incoming president. According to Just Capital, 56% of the tax savings from the new corporate tax rate went to shareholders with just 24% allocated to wages and job creation. Just 8% went to improving products and innovating, and the remainder went to lower prices and community involvement. In 2018, the bucket spilled over for stock buybacks. Capital spending, not so much. Stock Buybacks Provide a False Picture of a Business's Earnings StrengthThe main argument for stock buybacks is that the reduction in shares outstanding increases earnings per share which is the primary driver of higher share prices. A secondary consideration is that every shareholder gets a more significant piece of a smaller pie. It's no wonder, then, that Warren Buffett's a big fan of stock buybacks. Every time a company held by Buffett announces a $10 billion share repurchase program, he rubs his hands with glee because his ownership stake goes up without making an additional investment. It's the power of compounding in reverse. In 2014, I wrote an article entitled The 2 Biggest Lies of Buybacks. One paragraph sticks out for me to this day. "The premise that buybacks boost earnings is a big fat lie. It's an optical illusion meant to distract investors from the truth: Bottom-line growth is measured by net income only and not earnings per share," I wrote in 2014. "After all, you wouldn't judge top-line growth by anything other than revenue, would you?"In the article, I used Exxon Mobil (NYSE:XOM) as an example of how buybacks hide the truth. Because it bought back 4.4 billion shares between 2009 and 2013, while its net earnings were down 28% that year, EPS were down a more palatable 15%. You can argue till the cows come home why I'm wrong, but a 28% decline is a 28% decline, no matter how many shares are outstanding. Stock Buybacks Create Income InequalityAs I pointed out in a previous slide, the period between 1982-2017 has created a much wider gap between the man or woman at the top of the pyramid -- the CEO -- and the workers on the bottom.According to the Harvard Law School Forum on Corporate Governance and Financial Regulation, CEO pay between 1990 and 2016 increased by 438%. Meanwhile, according to the Pew Research Center, the average seasonally adjusted hourly wage in the U.S. between 1964 and 2018 grew by just 12% in constant 2018 dollars. The legalization of stock buybacks in 1982 gave CEOs a massive incentive for repurchasing their company's shares. Their pay packages went through the roof while the rank-and-file employees saw their wages barely budge. A rational person would see the causal link when it comes to income inequality. CEOs Love Stock BuybacksHey, if you're a CEO, I wouldn't blame you for taking advantage of the system. It's not your fault that the board of directors gave you such a lucrative compensation package. After all, they didn't have to. It's not as if you were holding a gun to their heads. Who wouldn't like a pay package that grows and grows and grows without any additional effort? As a writer, I'd love to be able to get paid X dollars to write this article today, X dollars plus next year, and X dollars plus, plus, the year after that. It is not going to happen. But it happens every day for CEOs. Is it any wonder why they love stock buybacks?Let's take Qualcomm (NASDAQ:QCOM) for example.In fiscal 2018, it repurchased 279 million shares of its stock for $22.6 billion. That alone would have a material effect on earnings per share, which is a significant factor in Qualcomm's annual cash incentive plan, as well as a considerable influence on both its performance stock unit and restricted stock unit awards. In fiscal 2018, CEO Steve Mollenkopf received total compensation of $20.0 million. The year before that it was $11.6 million and $11.1 million in fiscal 2016. Of Mollenkopf's total compensation, 86% was EPS-related to one extent or another. Do you think he's got an incentive to repurchase Qualcomm shares? I sure do. As of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post 7 Reasons Stock Buybacks Should Be Illegal appeared first on InvestorPlace.
For Macquarie, which upgraded shares of the energy giant to Outperform, it isn’t oil prices that will determine the fate of the stock. It’s all about production growth.
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Short interest in integrated energy stocksIn the preceding part, we analyzed institutional holdings in integrated energy stocks. Here, we’ll consider changes
In an interview with the Financial Times published this week, Al-Falih sketched out plans for Saudi Aramco to build an international exploration and production business for the first time. Any argument for the benefits of geographic diversification runs into the problem that Aramco sits on roughly 270 billion of what are regarded as among the lowest-cost barrels on the planet.
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Institutional ownership in integrated energy stocksNow we’ll review the changes in institutional ownership in Chevron (CVX), ExxonMobil (XOM), BP (BP), and
Shares of energy stocks, i.e. the energy sector of the S&P 500, has shown both absolute and relative strength in recent days versus the broader market. Within this space, shares of Exxon Mobil (NYSE:XOM) have shown good strength and XOM stock now looks poised to move higher toward a well-defined upside price target.As I always point out in this here column, money in the stock market at the margin is made where relative and absolute strength is found. To wit, while the energy sector of the S&P 500 has underperformed the broader market over the past few weeks, in the last few days new relative strength has emerged, and that is something I want to respect from a trading perspective.XOM stock, being a large component of the energy sector, has shown good strength in recent days and that led me to dig into its charts below. So you know, Exxon Mobil also sports a nice 4%-plus dividend yield that a more intermediate-to-longer-term investor might like.InvestorPlace - Stock Market News, Stock Advice & Trading Tips XOM Stock Charts Click to EnlargeMoving averages legend: red - 200 week, blue - 100 week, yellow - 50 weekOn the multiyear weekly chart, we see that XOM stock's lows in late December coincided with well-defined horizontal support from 2015 and 2011. It is also noteworthy, however, that since its 2014 highs this stock has only made a series of lower highs. * 9 U.S. Stocks That Are Coming to Life Again While I like the stock higher for a trade here, I do want to respect this series of lower highs, until proven otherwise. Click to EnlargeMoving averages legend: red - 200 day, blue - 100 day, yellow - 50 dayOn the daily chart, we see that XOM stock in late January, following its latest earning report, gapped higher out of a multiweek sideways consolidation range and back above its yellow 50-day simple moving average.Most recently on Feb. 12 the stock flashed a B2 Reversal Buy signal and now looks poised to move higher toward its red 200-day moving average as a next upside price target, which currently comes in around the $79-$80 area.While this recent relative strength in XOM stock and the energy sector as a whole is no guarantee this stock can't trade lower, if we take the constructive technical picture into consideration I feel good about this set up.A strong bearish reversal and break back below $73 would be a last-resort stop loss for me in this particular trading setup.Get FREE ACCESS to Serge's renowned Stock Market Scanner with actionable trade ideas. Get it HERE. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 U.S. Stocks That Are Coming to Life Again * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 5 Tips to Become a Better Stock Trader Compare Brokers The post Trade of the Day: Exxon Mobil Stock Is Poised to Rally More appeared first on InvestorPlace.
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Dividend payments in the first quarter Chevron (CVX), ExxonMobil (XOM), Royal Dutch Shell (RDS.A), and BP (BP) have paid dividends consistently in the past few
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Implied volatilities in integrated energy stocks Implied volatilities in integrated energy stocks have declined in the first quarter. The fall in implied
Shares of oil and gas companies were broadly higher Wednesday, as reports of supply cuts and optimism on U.S.-China trade talks helped fuel a rally in crude oil prices. The energy sector was the best performing of the S&P 500's 11 key sectors, with the SPDR Energy Select Sector ETF climbing 2.0% with all 30 equity components gaining ground. The biggest gainer was Newfield Exploration Co.'s stock , which ran up 4.5%. Among other more-active components, shares of Marathon Oil Corp. advanced 2.5%, Kinder Morgan Inc. rose 1.5%, Exxon Mobil Corp. tacked on 1.2%, Schlumberger NV climbed 2.3%, and Chevron Corp. gained 1.3%. Meanwhile, crude oil futures ran up 2.0%. The energy ETF has hiked up 13.9% year to date, while the S&P 500 has rallied 10.1%.
Integrated Energy Stocks on the Rise in Q1 as Oil Prices Surge(Continued from Prior Part)Integrated energy stocks rise in the first quarter In the first quarter so far, integrated energy stocks ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell