BP

Surveying 3Q Results at the Energy Majors

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Performance was far from rosy across the majors during the calendar third quarter. BP’s (BP) performance showed a 26% fall in underlying replacement cost profit, Exxon Mobil’s (XOM) third-quarter results revealed an 18% decline in earnings, Chevron’s (CVX) quarterly earnings dropped nearly 6% during the period, and Shell’s (RDS.A; RDS.B) third-quarter profit (on a current cost of supplies basis) slid 31% from the same period a year ago. Only ConocoPhillips’ third-quarter results (COP) showed adjusted earnings expansion during the quarter (about 7%). Source: Valuentum The investment landscape in the ‘Major – Oil & Gas’ space remains mixed, in our view. We liked ConocoPhillips third-quarter results, but its hefty capital investment plan and net debt position certainly don’t speak of equity … Read more

Exxon Misses, ConocoPhillips Raises Production, and Shell Writes Down North American Shale Assets

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As Valuentum members are aware, we think the oil majors each have their own respective strengths and weaknesses. Exxon Mobil (XOM) has consistently earned the best economic returns (ROCE) among peers, but its stock price is rich, trading at the high end of our fair value estimate range (at the time of this writing). ConocoPhillips (COP) continues to raise its production forecasts and is the second-best value-creator (ROCE) in the group. However, Chevron (CVX) has the strongest balance sheet among peers (it has the only net cash position), and by extension, is better-positioned to raise its dividend during the troughs of future energy-price cycles. Meanwhile, BP (BP) continues to deal with the aftermath of its well-publicized 2010 oil spill in … Read more

Freeport McMoRan Following the BHP Model

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Early Wednesday morning, leading copper and gold miner Freeport McMoRan (click ticker for report: ) announced a $9 billion blockbuster deal to acquire its former holding McMoRan Oil & Gas (click ticker for report: ) and independent oil and gas company Plains Exploration & Production (PXP). The deal itself values Plains at approximately $45-50 per share ($25 per share cash/0.6531 shares of FCX per share), while Freeport will pay $14.75 per share for McMoRan Oil & Gas. Given the cloudy long-term outlook for copper and gold mining, mainly a result of the often unfriendly places these resources reside, we think the company is happy to purchase operations in the Gulf and continental US. We’ve seen mine nationalization in both South … Read more

Analyzing Chevron and Important Updates in the Global Energy Industry

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Image Source: Chevron Corporation – November 2019 IR Presentation Summary In this note, let’s cover the current state of raw energy resource prices in North America and around the world. We’ll analyze Chevron’s 2020 capital investment and exploration budget, in particular, and the global energy industry at-large. Shares of CVX appear generously valued as of this writing given the numerous headwinds facing the energy industry going forward. By Callum Turcan The world of oil and gas equities has been battling with persistently low raw energy resource prices for some time now. Back in the middle of 2014, a barrel of light sweet crude delivered to Cushing, Oklahoma (home of the West Texas Intermediate, or WTI, benchmark), would fetch over $100. Now … Read more

Worst in Energy Not Over, Stay Away from Leveraged Enterprises, Seeds of Financial Crisis Sown?

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Image Shown: The energy and banking markets continue to be experiencing pain. Since we removed the Energy Select Sector SPDR (XLE) and Financial Select Sector SPDR (XLF) from the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio, the XLE has fallen more than 50% and the XLF has fallen 13%, while the SPY has held up roughly 2%. We continue to believe staying away from energy and financials/banks will be a source of significant alpha. These are challenging times. The oil price swoon has complicated an already-dire situation with COVID-19. We’re seeing cracks in the credit markets, and the European banking system is far from healthy. The US banks may face knock-on impacts from energy loan defaults and hold … Read more

Dividend Increases/Decreases for the Week of August 8

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Below we provide a list of firms that raised their dividends during the week ending August 8. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Alphamin Resources Corp. (AFM:CA): now CAD 0.07 per share semi-annual dividend, was CAD 0.06. Ambev (ABEV): now $0.0230 per share quarterly dividend, was $0.0219. Annaly Capital Management, Inc. PFD SER G (NLY.PR.G): now $0.5577 per share quarterly dividend, was $0.5518. Annaly Capital Management, Inc. PFD STK I 6.75% (NLY.PR.I): now $0.6098 per share quarterly dividend, was $0.6034. Aura Minerals (AUGO): now $0.33 per share … Read more

How to Think About Corporate Tax Reform

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Energy Sector In Shambles, Looks to Recover But Headwinds Persist

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Image Source: ConocoPhillips – November 2019 Analyst and Investor Meeting IR Presentation Executive Summary: Though raw energy resource pricing is on the rebound, the outlook for the oil and gas industry remains stressed. Global demand for oil and related refined petroleum products remains subdued due to headwinds generated by the ongoing coronavirus (‘COVID-19’) pandemic. The OPEC+ oil cartel has responded by pledging to keep a significant amount of oil output off the market for an extended time. However, raw energy resource prices need to go much higher and be sustained at elevated levels before the space could become attractive from a longer-term perspective. In our view, the US upstream industry (specifically those in the shale patch) need WTI to move … Read more

Newsletter Portfolio Idea Chevron Focused on Returning Cash to Shareholders

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Image Shown: Newsletter portfolio idea Chevron Corporation is very shareholder friendly. We view its capital allocation priorities quite favorably. Image Source: Chevron Corporation – May 2022 IR Presentation By Callum Turcan Our newsletter portfolios remain overweight energy names as these companies are well-positioned to ride out inflationary pressures and geopolitical turbulence while generating substantial free cash flows and returning “gobs” of cash to shareholders. We include Chevron Corporation (CVX) in our Best Ideas Newsletter, Dividend Growth Newsletter, and High Yield Dividend Newsletter portfolios as the firm has placed a great emphasis on keeping its capital expenditures contained, improving its cost structure, and cutting down on its debt load while returning “gobs” of cash to shareholders. Financial Overview At the end … Read more

Update: Frequently Asked Questions About Valuentum Securities, Inc.

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What is Valuentum Securities? Valuentum (val∙u∙n∙tum) [val-yoo-en-tuh-m] Securities Inc. is an independent investment research publisher, offering premium equity reports and dividend reports, as well as commentary across all sectors/companies, a Best Ideas Newsletter (spanning market caps, asset classes), a Dividend Growth Newsletter, modeling tools/products, and more. Independence and integrity remain our core, and we strive to be a champion of the investor. Valuentum is based in the Chicagoland area. Valuentum is not a money manager, broker, or financial advisor. Valuentum is a publisher of financial information. How do I subscribe to Valuentum’s investment research services? 1)    Click the following link: signup-page. 2)    Select your membership plan. 3)    Enter your contact details. 4)    Click ‘Sign Up.’ 5)    Complete your purchase. 6)   Your payment profile may be recurring, so please check … Read more