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With oil prices climbing in recent weeks and reaching $100 per barrel, what are some ways to invest in this industry and create current income? Basic materials companies pay pretty good dividends, as I noted in an earlier article. More specifically, there should be opportunities within a more focused industry. However, this screen will eliminate the gas transport master limited partnerships that often can provide good current income to focus on other areas, including E&P, refineries, and major integrated players.

The following stocks showed the highest dividend yields from market close on March 12, 2011.

Top Dividend Yielding Oil & Gas Stocks
TickerNameMarket Cap ($ millions)Div. Yield %
RDS.ARoyal Dutch Shell plc 215,524 4.9%
TOTTotalFinaElf, S.A. 131,467 4.2%
TRPTranscananda Pipelines, Ltd. 27,996 4.0%
SESpectra Energy Corp 17,007 4.0%
EENI S.p.A. 97,250 3.8%
COPConocoPhillips 109,082 3.5%
ENBEnbridge Inc 22,850 3.3%
STOStatoil ASA 84,150 3.0%
UGPUltrapar Participacoes S.A. 8,743 2.9%
CVXChevron Corporation 200,604 2.9%
BPBP p.l.c. 143,323 2.8%
ECAEncana Corporation 22,582 2.6%
ESVENSCO plc 7,871 2.5%
CVECenovus Energy Inc 27,044 2.2%
ECEcopetrol S.A. 84,972 2.2%
XOMExxon Mobil Corporation 407,200 2.1%
MROMarathon Oil Corporation 35,635 2.0%
Data provided by Zacks.com services. RDS-A data is from Yahoo!Finance and is current from March 11, 2011.

These stocks represent a way to gain exposure to the oil & gas industry while producing current income.

Stock Snapshots:

Royal Dutch Shell plc (NYSE: RDS.A) - Integrated Oil & Gas Firm - RDS.A has a market capitalization of $215.5 billion. RDS.A shows a trailing P/E ratio of 10.5x, which decreases compared to its forward P/E of 1x, suggesting phenomenal earnings per share growth. RDS.A just closed at $68.86 per share, which is 40.1% above its 52-week low of $49.16 and 7.2% below its 52-week high of $73.85 per share. The stock has a very low price to sales ratio at 0.6x. On an operating cash flow basis, RDS.A appears to be a good value with upside.
TotalFinaElf, S.A. (NYSE: TOT) - Integrated Oil & Gas Firm - TOT has a market capitalization of $131.5 billion. TOT shows a trailing P/E ratio of 9.6x which decreases compared to its forward P/E of 8.4x. This suggests some earnings per share growth. TOT just closed at $58.83 per share, 33.1% above its 52-week low of $44.21 and 4.7% below its 52-week high of $61.59 per share. TOT has a very low price to sales ratio at 0.6x. On an operating cash flow basis, TOT appears to be a good value with upside.
Transcananda Pipelines, Ltd. (NYSE: TRP) - Production and Pipelines - TRP has a market capitalization of $28 billion. TRP shows a trailing P/E ratio of 21.1x which decreases compared to its forward P/E which is 17.7x. This suggests some earnings per share growth. TRP just closed at $40.05 per share which is 24.5% above its 52-week low of $32.17 and 0.4% below its 52-week high of $40.21 per share. TRP has a medium price to sales ratio at 3.5x.
Spectra Energy Corp (NYSE: SE) - Oil & Gas Pipelines - SE has a market capitalization of $17 billion. SE shows a trailing P/E ratio of 16.6x which decreases compared to its forward P/E of 15.3x. This suggests mild earnings per share growth. SE just closed at $26.22 per share, 36.6% above its 52-week low of $19.2 and 3.1% below its 52-week high of $27.02 per share. SE has a medium price to sales ratio at 3.4x. On an operating cash flow basis, SE appears to have little upside improvement.
ENI S.p.A. (NYSE: E) - Integrated Oil & Gas Firm - E has a market capitalization of $97.3 billion. E shows a trailing P/E ratio of 9.3x which decreases compared to its forward P/E which is 8x, suggesting some earnings per share growth. E just closed at $48.56 per share, 37.3% above its 52-week low of $35.37 and 3.6% below its 52-week high of $50.3 per share. E has a very low price to sales ratio at 0.7x. On an operating cash flow basis, E appears to be cheaply valued.
ConocoPhillips (NYSE: COP) - Integrated Oil & Gas Firm - COP has a market capitalization of $109.1 billion. COP shows a trailing P/E ratio of 12.8x which decreases compared to its forward P/E which is 10.8x, suggesting some earnings per share growth. COP just closed at $76.3 per share which is 56.3% above its 52-week low of $48.82 and 4.8% below its 52-week high of $79.98 per share. COP has a very low price to sales ratio at 0.6x. On an operating cash flow basis, COP appears to be a good value with upside.
Enbridge Inc (NYSE: ENB) - Production and Pipelines - ENB has a market capitalization of $22.9 billion. ENB shows a trailing P/E ratio of 22.8x which decreases compared to its forward P/E which is 20.7x, suggesting mild earnings per share growth. ENB just closed at $59.3 per share, 36.5% above its 52-week low of $43.44 and 1.3% below its 52-week high of $60.1 per share. ENB has a low price to sales ratio at 1.5x. On an operating cash flow basis, ENB appears to have little upside improvement.
Statoil ASA (NYSE: STO) - Integrated Oil & Gas Firm - STO has a market capitalization of $84.1 billion. STO shows a trailing P/E ratio of 9.5x which increases compared to its forward P/E of 9.8x, suggesting an earnings decline. STO just closed at $26.43 per share, 41.5% above its 52-week low of $18.68 and 4.7% below its 52-week high of $27.67 per share. STO has a low price to sales ratio at 1x. On an operating cash flow basis, STO appears to be a good value with upside.
Ultrapar Participacoes S.A. (NYSE: UGP) - Production and Pipelines - UGP has a market capitalization of $8.7 billion. UGP shows a trailing P/E ratio of 19x which decreases compared to its forward P/E which is 16.3x, suggesting some earnings per share growth. UGP just closed at $16.06 per share which is 53.4% above its 52-week low of $10.47 and 2.6% below its 52-week high of $16.47 per share. UGP has a very low price to sales ratio at 0.4x. On an operating cash flow basis, UGP appears to have little upside improvement.
Chevron Corporation (NYSE: CVX) - Integrated Oil & Gas Firm - CVX has a market capitalization of $200.6 billion. CVX shows a trailing P/E ratio of 10.6x which decreases compared to its forward P/E which is 9.1x, suggesting some earnings per share growth. CVX just closed at $99.93 per share which is 48.5% above its 52-week low of $67.31 and 4.3% below its 52-week high of $104.19 per share. CVX has a low price to sales ratio at 1x. On an operating cash flow basis, CVX appears to be a good value with upside.
BP p.l.c. (NYSE: BP) - Integrated Oil & Gas Firm - BP has a market capitalization of $143.3 billion. BP shows a trailing P/E ratio of 6.5x which increases compared to its forward P/E which is 6.9x, suggesting an earnings decline. BP just closed at $45.75 per share which is 69.3% above its 52-week low of $27.02 and 32.4% below its 52-week high of $60.57 per share. BP has a very low price to sales ratio at 0.5x. On an operating cash flow basis, BP appears to be cheaply valued.
Encana Corporation (NYSE: ECA) - Oil Exploration and Production - ECA has a market capitalization of $22.6 billion. ECA shows a trailing P/E ratio of 28.4x which increases compared to its forward P/E which is 44.5x, suggesting an earnings decline. ECA just closed at $30.71 per share which is 15.9% above its 52-week low of $26.5 and 13.1% below its 52-week high of $34.73 per share. ECA has a low price to sales ratio at 2.6x. On an operating cash flow basis, ECA appears to be a good value with upside.
ENSCO plc (NYSE: ESV) - Oil & Gas Drilling - ESV has a market capitalization of $7.9 billion. ESV shows a trailing P/E ratio of 14.6x which increases compared to its forward P/E which is 14.9x, suggesting an earnings decline. ESV just closed at $55.23 per share which is 60.3% above its 52-week low of $34.45 and 4% below its 52-week high of $57.46 per share. ESV has a high price to sales ratio at 4.6x. On an operating cash flow basis, ESV appears to have little upside appreciation.
Cenovus Energy Inc (NYSE: CVE) - Oil & Gas Drilling - CVE has a market capitalization of $27 billion. CVE shows a trailing P/E ratio of 34.6x which declines compared to its forward P/E which is 23.5x. CVE shows a trailing P/E ratio of 34.6x which decreases compared to its forward P/E which is 23.5x. This suggests strong earnings per share growth. CVE just closed at $35.93 per share which is 47.1% above its 52-week low of $24.43 and 10.5% below its 52-week high of $39.7 per share. CVE has a low price to sales ratio at 2.1x. On an operating cash flow basis, CVE appears to have little upside improvement.
Ecopetrol S.A. (NYSE: EC) - Independent Oil & Gas - EC has a market capitalization of $85 billion. EC shows a trailing P/E ratio of 20.4x which decreases compared to its forward P/E of 15.6x, suggesting strong earnings per share growth. EC just closed at $41.99 per share, 61.5% above its 52-week low of $26 and 23.6% below its 52-week high of $51.92 per share. EC has a high price to sales ratio at 4.4x. On an operating cash flow basis, EC appears to have little upside improvement.
Exxon Mobil Corporation (NYSE: XOM) - Integrated Oil & Gas Firm - XOM has a market capitalization of $407.2 billion. XOM shows a trailing P/E ratio of 13.2x which decreases compared to its forward P/E of 11.1x. This suggests some earnings per share growth. XOM just closed at $82.12 per share, 45.2% above its 52-week low of $56.57 and 6% below its 52-week high of $87.07 per share. XOM has a low price to sales ratio at 1.1x. On an operating cash flow basis, XOM appears to be a good value with upside.
Marathon Oil Corporation (NYSE: MRO) - Integrated Oil & Gas Firm - MRO has a market capitalization of $35.6 billion. MRO shows a trailing P/E ratio of 13.8x which decreases compared to its forward P/E which is 10.2x. This suggests strong earnings per share growth. MRO just closed at $50.17 per share which is 66.2% above its 52-week low of $30.19 and 5% below its 52-week high of $52.66 per share. MRO has a very low price to sales ratio at 0.5x. On an operating cash flow basis, MRO appears to be a good value with upside.

Conclusion
The major integrated oil & gas companies continue to offer attractive dividends and would represent good additions to portfolios. These stocks should continue to benefit from growth within the oil & gas sector. In terms of valuation, E, COP, XOM, MRO, TOT and RDS.A represent the best opportunities.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: This article is for informational and educational purposes only and shall not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, recommendation or endorsement to buy or sell any security.
Source: 17 Top Oil and Gas Stocks With Attractive Dividends