Many other articles on this site have been bullish on Big Oil stocks such as ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX).
A recent report from BP PLC (NYSE: BP), the major oil and natural gas firm headquartered in London, is also very positive on the sector. Like reports from the International Energy Agency and the US Department of Energy, the BP Energy Outlook predicts a significant increase in energy. Between 2012 and 2035, BP sees energy demand rising by 41 percent. Like the studies from the US Department of Energy and the International Energy Agency, BP expects most of that to come from emerging market nations like China, Brazil, India and others.
Of that increasing demand, over half will be met by oil and natural gas.
Oil and natural gas will each provide about 27 percent of the world’s energy needs by 2035, according to the BP study. Coal will also account for more than one-quarter of the world’s energy demands. For renewable energy, it will only be about 7 percent. As has been stated in other articles on this site, renewable energy simply does not have the potential to meet widespread needs.
For investor needs, Big Oil will continue to be a solid provider of rewarding total returns.
That will come both from a rising stock price and growing dividend income. BP, Chevron, and ExxonMobil all have dividend yields that are higher than average. For dividend income stocks, the energy sector has many fine companies for investors looking for dividend yield.
The BP Energy Outlook confirms what has been detailed in other articles on this site. Big Oil stocks are a very useful component in an investment portfolio. Demand for the products and services of BP, ExxonMobil, Chevron, and others will only increase in the future. As a result, so should the stock price and the dividend yields.