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Bakken Production Is Booming and Continental Resources Is a Winner

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 Key Takeaways: ·        Continental Resources is an oil and gas E&P with the largest shale position in the Bakken. ·        Production and proved reserves have significant room to grow. ·        A supermajor oil company like Exxon or Chevron could be interested in acquiring Continental. ·        We believe shares have 35% upside from current levels. Production of shale oil in the Bakken (1) continues to grow rapidly, and the long-term production fortunes in the region remain as positive as ever. Let’s take a look at Continental Resources (click ticker for report: ), a firm we believe has 35% upside from current levels and one that recently made our list of The 25 Cheapest Stocks on the Market. (1) The Bakken field … 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

Firms Increasing Their Dividends During the Week Ending July 12 Included Paychex and Fastenal

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Below we provide a list of firms that upped their dividends for the week ending July 12. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports, please click here. Firms Raising Their Dividends This Week ConocoPhillips (COP): now $0.69 per share quarterly dividend, was $0.66. Paychex (PAYX): now $0.35 per share quarterly dividend, was $0.33. Fastenal Company (FAST): now $0.25 per share quarterly dividend, was $0.20. KLA-Tencor (KLAC): now $0.45 per share quarterly dividend, was $0.40. << Last Week’s Dividend Increases Ever wonder why we use the Valuentum Dividend Cushion score as a key component of our dividend analysis? Click here.

Exxon Mobil Struggles For Growth

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Supermajor oil producer Exxon Mobil (click ticker for report: ) reported lackluster revenue of $108.8 billion, which fell a bit shy of consensus estimates. Earnings per share increased 6% year-over-year to $2.12, exceeding consensus expectations. However, earnings were only modestly higher, growing 1% year-over-year to $9.5 billion. Unfortunately for Exxon, operating cash flow declined 30% compared to the same period a year ago, to $13.6 billion. This came at the same time the firm invested $11.8 billion in capital expenditures and exploration, thus free cash flow declined precipitously. Though Exxon is among the largest companies in the world, its earnings stream contains several moving parts and remains reliant on global oil prices. Exxon’s upstream segment struggled with lower volumes and … Read more

ConocoPhillips Posts Decent Fourth Quarter Results

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Oil giant ConocoPhillips (click ticker for report: ) reported decent fourth quarter results Wednesday night. Earnings, adjusted for certain items and to reflect the divestiture of Phillips 66 (click ticker for report: ), declined 8% year-over-year to $1.43 per share, which was a penny better than the Street expected. Production was up modestly compared to the same period a year ago, growing 1.8% to 1,607 MBOE (MBOE = one thousand barrels of oil equivalents), with production hitting record numbers in the Eagle Ford and Bakken shales. The firm also had solid growth in reserve replacements, which totaled 156% for the year at 8.6 million BOE. The majority of reserves came from oil sands in Canada, as well as increased provable … Read more

Dividend Growth Portfolio Holding Phillips 66 Caps Off 2012 with an Outstanding Fourth Quarter

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Dividend Growth Newsletter portfolio holding Phillips 66 (click ticker for report: ) announced another fantastic quarter Wednesday morning. The company has been one of the biggest winners in the portfolio of our Dividend Growth Newsletter. We expect to update our dividend report on the firm soon. Adjusted earnings per share jumped over 240% year-over-year to $2.06, smashing consensus estimates. Earnings for the year jumped 50% to $8.46, highlighting the considerable operating leverage inherent to the refinery business. Shares are now up over 90% since being spun off from ConocoPhillips (click ticker for report: ) in 2012. Cash flow generation was superb, as the firm raked in $1.3 billion in operating cash flow. $1 billion was used to reduce debt, leaving the … Read more

The Valuentum Dividend100 Publication; A Must-Have For Any Income Investor

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Dividend investors literally have thousands of income stocks to choose from. So what are they to do, and where can they go for the most trusted forward-looking opinions on dividend growth and safety? That’s the question we seek to answer with our ValuentumDividend100 publication. In this document, we showcase the top 100 high-quality, dividend growth gems within our coverage universe. Whether you’re looking to build a portfolio consisting of high-yielding, dividend-growers or simply seeking to augment it with a few income gems, the Valuentum Dividend100 is an essential resource for any income investor. We outline some of the key components of our Dividend100 publication below, and explain how you can get the most from each of one Sign Up for … Read more

Phillips 66 Joins the MLP Boom

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Early Thursday morning, refiner and chemical producer Phillips 66 (click ticker for report: ) announced its capital-spending intention for 2013, which includes $3.7 billion in capital investment—up 6% compared to 2012. The firm also announced ambitions to raise $400 million for a minority stake in a new master limited partnership (MLP) IPO, which it anticipates will include transportation assets like pipelines, rail cars, as well as NGL products for transportation. Phillips 66 described the MLP as an opportunity to capitalize on the “North American oil and gas revolution.” MLPs tend to have favorable tax treatment for oil-transportation business models, and we think the new Phillips 66 MLP will be a unique play on one of the best-performing refiners. The MLP … Read more

A Dual Focus on Valuation and Yield Is the Best Way to Combat Changes in Future Dividend Tax Rates

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With a potential hike in the dividend tax rate just around the corner, there is no more important time than now for income investors to evaluate their existing portfolio holdings to determine whether they are well-positioned for a higher-tax environment. Assuming there are no changes to the current trajectory, the top dividend tax rate is expected to rise to 39.6% next year (up from 15% currently), and the highest-income earners will see a Medicare surtax on top of that. Evaluate All Aspects of a Dividend Investment First of all, we think those investing in high-yielders (firms) at any price (HYAAP) may be most affected by this change in tax rates. These high-yielders at any price (HYAAP) tend to be favorites of those at or near retirement, particularly given the paltry payouts on fixed … Read more

Downstream Profits Alleviate E&P Weakness at Exxon Mobil

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Diversified oil giant Exxon Mobil (click ticker for report: ) reported weak third quarter results Thursday morning. The firm saw revenue decline 7% year-over-year to $115.7 billion, which was slightly better than consensus expectations. Earnings per share fell just 2% year-over-year to $2.09, which also exceeded consensus estimates. Exxon’s third quarter reflected the divergence between E&P (exploration & production) versus downstream refining. However, unlike ConocoPhillips (click ticker for report: ), which spun-off Phillips 66 (click ticker for report: ), Exxon owns both businesses, thus allowing this quarter’s weakness in E&P to be offset by downstream operations. E&P (also known as upstream) earnings fell 29% year-over-year to $5.9 billion due to waning oil and gas production, which fell 7.5%. Chemical earnings … Read more