2 Energy Stocks with High Dividend Yields

Stock prices may have started a new uptrend, yet to be confirmed, even though the economic news may not be encouraging. Futures prices for oil and gas may closely follow stocks considering the strong winter demand season is approaching. Stock prices were ahead of futures in confirming the need for investor patience in the recent downtrend. Oil and gas stock prices fell below the 200-day average in July, while oil and gas futures fell below the 200-day average in early September.

Meanwhile, quarterly results to be reported in the next few weeks are likely to be positive compared to the year ago quarter, judging by the trajectory of oil and gas price. The markers were strong indicators of actual results in past quarters. Reported results can also reveal surprises and at the least provide operating information for use in anticipating more precisely the impact of commodity price in future quarters.

Enthusiastic about the potential for a seasonal rebound in stock price into next year, we have buy recommendations on 11 stocks. Wary of the political risk in the first year of a new president’s term, we have hold recommendations on 18 stocks. Among the latter, blue chips Royal Dutch Shell (RDS) and BP plc (BP) offer high dividend yields of 5.9% and 6.6%, levels not seen in a long time.

Originally published on October 21, 2008.