Big Oil Stocks Slipping: Time to Buy?
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John Murphy
Big Oil Stocks Slipping: Time to Buy?
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As with so many others, Big Oil stocks such as Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), Royal Dutch Shell (RDS-B), and others are starting to give up some of the gains of 2013.

That should ring out a loud, clear buy signal for long term investors!

Many other articles on this site have detailed the reasons to be bullish about Big Oil for the future.  Reports from the US Department of Energy, the International Energy Agency, and others have predicted that the demand for energy will increase greatly.  Most of that will have to be met by oil and  natural gas.  Coal is too dirty.  Alternative energy cannot meet mass demand.  As a result, oil and natural gas companies that operate around the world such as Occidental Petroleum (NYSE: OXY), Chevron, ExxonMobil will gain from that increasing need for energy.

While there will not be tremendous growth from these firms, all have a history of being generous in providing shareholders with a stream of dividend income that grows.

At present, the average dividend yield for a member of the Standard & Poor’s 500 Index is around 1.9 percent.  The dividend yield for Chevron is 3.42 percent. For ExxonMobil, the world’s biggest oil and gas company and potentially the largest publicly traded one soon, it is 2.63 percent.  Occidental Petroleum pays a dividend of 2.90 percent.  The second largest oil and gas concern in the world, Royal Dutch Shell, has a dividend yield of 4.64 percent.

The dividends paid by major oil firms will most likely be increased.

That is the tradition of the management of the companies.  From that, the total return for shareholders will be much greater.  The increasing demand for oil and natural gas from countries such as China and India along with the rising dividend yields should make Chevron, ExxonMobil, Occidental Petroleum, Royal Dutch Shell, and other major oil companies rewarding long term investments.


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