Big Oil continues to Deliver Big Retu...
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Jun
5
Tim Lambert
Big Oil continues to Deliver Big Returns
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Many previous articles on this site have focused on the bullish outlook for Big Oil stocks such as BP PLC (NYSE: BP), Chevron (NYSE: CVX), and ExxonMobil (NYSE: XOM).

That outlook has been justified by the performance of those stocks.

Over the last year of market action, BP is up more than 25 percent.  ExxonMobil is up more than 13 for the period.  Over the last quarter of trading, ExxonMobil has jumped by over 7 percent.

The outlook continues to be bullish due to global economic growth.

The world’s economy continues to recover from The Great Recession.  China and India are implementing policies that are very good for economic growth.  As the two most populous nations in the world, that will only lead to more energy consumption.  Oil and natural gas companies are favored here as countries are trying to move away from using coal due to the environmental damage.

Income investors should be even more pleased with what the future holds for Big Oil stocks.

Big Oil firms are known for having very generous dividends.  That is certainly the case with BP, Chevron, and ExxonMobil.  At present, the average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY).  The dividend yield for BP is nearly 4.7 percent.  For Chevron, it is 3.50 percent.  ExxonMobil provides its shareholders with an income stream at the rate of 2.67 percent.

For long shareholders, there are even more benefits to the dividend income of BP, Chevron, and ExxonMobil.

These companies have a history of increasing the amount of the dividend.  That means that shareholders get a raise just for owning the stock.  Over time, that greatly increases the total return for shareholders of Big Oil.  Combined with the growth ahead in the demand for oil and natural gas, that should make the future very promising for the shareholders of Big Oil.

 



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