Of the many appealing features of Big Oil, offering access to growth around the world is one. A report from McKinsey Global Institute, “Who Will Win the $30 Trillion Decathlon,” projected that 69 percent of the increase in consumption around the world will be in emerging market countries in Asia, Latin America, and other areas. Based in Bogota, Colombia, EcoPetrol SA (NYSE: EC) is ideally positioned to gain from that rising need for oil and natural gas.
EcoPetrol SA is superior to better-known energy entities such as ExxonMobil (NYSE: XOM), Chevron (NYSE: CVX), and Occidental Petroleum (NYSE: OXY) in 3 significant ways.
Warren Buffett looks for a return-on-equity of over 20 percent. The return-on-equity for EcoPetrol SA is nearly 24 percent. By contrast, the return-on-equity for ExxonMobil is just 19.30 percent. For Chevron, it is only 14.30 percent. Occidental Petroleum has a return-on-equity of 14 percent.
The average profit margin for a company on the Standard & Poor’s 500 Index (NYSE: 500) is under 10 percent. For EcoPetrol SA, it is 20 percent. The profit margin for Chevron is 9.70 percent. For ExxonMobil, it is 7.70 percent.
For income investors, EcoPetrol SA is truly alluring!
At present, the dividend yield for the average member of the Standard & Poor’s 500 Index is under 2 percent. For ExxonMobil, it is 2.66 percent. The dividend yield for Occidental Petroleum is 3.07 percent. EcoPetrol SA has a high dividend yield of more than 7 percent. Big Oil stocks are great for Big Dividend Income!
Many previous articles on this site have detailed why Big Oil stocks are so attractive for long term investors.
EcoPetrol SA certainly has all of those attributes, and more. Texas is a great state, but not all oil and natural gas firms are headquartered there (although Occidental Petroleum recently announced it is moving to Houston). Operating from South America, EcoPetrol SA will naturally gain from growth in that continent. The high dividend yield will add to the total return for shareholders.