Many previous articles on this site have detailed why energy stocks, particularly Big Oil such as ExxxonMobil (NYSE: XOM) and BP (NYSE: BP), the biggest oil and natural gas stock in the world and the second largest in Europe, are solid buys for the long term.
Recent market action has proven that to be correct.
Global turmoil has sent investors into the energy and natural gas sector. This has manifested itself in many ways. Investors from around the world are buying tens of billions of oil and natural gas assets in North America. Investors now prize the political security and economic stability of the United States and Canada.
That is also showing up in the stock prices of Big Oil.
ExxonMobil, BP, and others have stayed strong. ExxonMobil is up for the last week, quarter, six months, and year of market action. For the last year, ExxonMobil is up double digits.
It is much the same story for BP (chart below).
BP is up for the last quarter, six months, and year of market action, For 2014, BP has risen by nearly 8 percent. Over the last year of market action, BP has surged by more than 23 percent.
Much of that has to do with the dividend yields of BP and ExxonMobil!
In times of market turmoil, there is much to be said for a steady stream of dividend income. It anchors the portfolio in turbulent market conditions. No matter what, investors can expect a solid flow of dividends. Both BP and ExxonMobil have an above average dividend yield (the average is about 1. percent for a member of the Standard & Poor’s 500 Index (NYSE: SPY).
Investors should expect the same solid returns from BP, ExxonMobil and other stocks in the sector the future. The world is not calming down. Neither is the demand for energy. As most of that comes from oil and natural gas, ExxonMobil, BP, and others should continue to outperform!