Published Mon, 19 Nov 2012 20:30 CET by TopYields.nl
The outlook for American integrated oil and natural gas giants, namely Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP), has just brightened. In its latest 2012 World Energy Outlook, the International Energy Agency predicts that the U.S., which for the first time since 1949 has become a net exporter of petroleum products, will be the leading oil producer by 2020. This is made possible by new conventional discoveries and technological advances that are boosting production from shale formations. The nation's largest companies are taking advantage of this boom and elevated oil prices, which are likely to be supported in the future by growth in emerging markets, especially in China and India. The leading market positions of the American energy titans so far has enabled them to generate substantial earnings and cash windfalls, which, in turn, has supported their generous dividend policies. A cash-rich Chevron, traditionally a dividend-growth play, has been and will continue to be a particularly attractive income and growth stock.
In terms of total returns, over the past decade, Chevron has outperformed its main competitors, Exxon Mobil and ConocoPhillips. In the noted period, Chevron's stock produced a total return of 15.5% per year, while Exxon Mobile and ConocoPhillips generated total returns of 11.9% and 14.9% per year, respectively. For comparison, BP (LSE: BP)(NYSE: BP) produced a comparatively paltry total return of 4.4% per year. Total returns have been driven by both strong capital appreciation and dividend growth. In terms of return on equity, both Chevron and Exxon Mobil have achieved 5-year average return on equity in excess of 20%. For comparison, ConocoPhillips has a 5-year average return on equity of only 6.8%.
As regards the dividends specifically, Chevron, whose dividend currently yields 3.5%, grew its dividends at an average annual rate of 9.2% over the past five years. Over the same period, Exxon Mobil and ConocoPhillips expanded their dividends at higher average annual rates of 9.7% and 10.0%, respectively. Despite the marginally higher dividend growth rate than Chevron's, Exxon Mobil is yielding 90 basis points less, or 2.6%. On the other hand, ConocoPhillips has the highest dividend yield of the three, at 4.8%. However, ConocoPhillips' payout ratio as percentage of free cash flow is the highest among the three.
Stock symbol(s): BP,BP.L,CHK,COP,CVX,XOM
|Stock name||ISIN||Last trade||P/E||EPS||Div PS||Ex Div Date||Payout Ratio||Div Yield|
|BP||US0556221044||48.27||15.0||322.0||2.34||Aug 06 2014||1||4.85|
|BP||GB0007980591||483.85||13.1||36.8||22.28||Aug 06 2014||60||4.60|
|CONOCOPHILLIPS||US20825C1045||80.98||12.4||649.0||2.92||Jul 17 2014||0||3.61|
|CHEVRON||US1667641005||127.93||12.2||1048.0||4.28||Aug 15 2014||0||3.35|
|EXXON MOBIL||US30231G1022||99.28||12.7||785.0||2.76||Aug 11 2014||0||2.78|
|CHESAPEAKE ENERGY||US1651671075||26.46||35.3||74.5||0.35||Jul 14 2014||0||1.32|
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