Anyone who’s been following me for a while knows that I’m hot on traditional energy, both as a trading vehicle and an investing staple. Rising demand coupled with rapid shifts in global supply have created amazing opportunities in this space, and we’re decades away from the renewable future. That means for now, oil and gas are still king.
For long-term energy plays, my rubric is pretty simple – strong balance sheets, high dividends with lots of money available to common shareholders, and room for growth potential in both the stock price and the dividend payments.
So when my research reveals a company that not only checks off all the boxes, but excels at them… well, I have to make sure you know about it.
I’m talking about a hydrocarbon exploration, development, and production company out of Houston boasting almost a $19 billion market cap and over $9 billion in TTM (trailing 12-month) revenue. That sounds impressive, but what really interests me is the profit margin on that revenue – a whopping 45.5%.
And it gets even better when you look at it through the lens of income investing. $4.13 billion available to common shareholders, which they’ve used to fuel almost a 10% dividend over the course of the past year.
But while other companies are leaning on debt to maintain yields that high, this firm is doing it with just 40% of their available net income. That means there’s plenty of room for them to increase that dividend in the future.
I just can’t think of a better combo right now for you to throw in $100, or $1000, or whatever you’ve got… and take it to the bank.
Check out the video for the ticker and my full breakdown:
— Shah Gilani
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Source: Total Wealth