4 Major Energy Stocks With Attractive Dividend Yields

Includes: BP, EC, RDS.A, TOT
by: Jordan Flannery


Oil prices have declined in recent weeks, and as a result the stock prices of many Oil companies have also decreased. WTI crude currently trades at around $88 per barrel, which is over 20% off its 52-week high. This seems to be a great opportunity to initiate or increase a position in these companies, which are leveraged to oil prices. Additionally, clarity from Washington regarding dividend taxation for the coming year could provide investors with more confidence in high-profile dividend names, such as these. The following stocks are all energy companies with a market cap of over $100 Billion, and a dividend yield over 5%. This list is meant to be a base for further research.

Royal Dutch Shell (NYSE:RDS.A)

Market Cap: $205 Billion

Dividend Yield: 5.14%

PE Ratio: 7.9x

This Dutch oil and gas major is down 5% in USD terms over the last year. The valuation appears cheap relative to its peers, with a good dividend yield. This is one of the more attractive names on this list and with a few major capital projects planned, Shell should warrant further investigation.

Ecopetrol (NYSE:EC)

Market Cap: $118 Billion

Dividend Yield: 5.2%

PE Ratio: 11.2x

This Colombian oil company usually flies below the radar when talking about international oil companies. It has a rather good yield, but the PE ratio is a bit higher than its peers. The stock is up over 34% in USD terms in the past year. Last month, Ecopetrol reported its third deepwater discovery in the U.S. Gulf of Mexico.

Total (NYSE:TOT)

Market Cap: $113 Billion

Dividend Yield: 6.07%

PE Ratio: 8.5x

Total, a French company has significant overseas assets, and trades rather cheaply. It also has a quite good dividend yield. Total is down slightly more than 2% in USD terms in the past year. On December 5, of this year, Total announced an oil discovery in the U.S. Gulf of Mexico.


Market Cap: $131 Billion

Dividend Yield: 5.22%

PE Ratio: 7.3x

BP has been under heavy scrutiny since its Deepwater Horizon oil spill in 2010, with a recent $4.5 Billion settlement with the U.S. Government. This uncertainty has put pressure on the stock and has limited the upside potential. While BP is cheap and has a good yield, I would proceed with caution given the uncertainty surrounding the company. However, investors are being paid to wait for the dust to settle.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.