Cheaper Alternatives to Exxon

Exxon (XOM) gets slammed by the Union of Concerned Scientists for trying to suppress science on climate change and hurt the planet for profit. See ThePanelist NewsFlash. I had a link to the ExxonMobile response but they seem to have taken it down from their website on Corporate Citizenship.

I want exposure to the oil, gas and energy industries. Energy will only get more important as China and India continue to industrialize and become consumers. But Exxon is not the best way to play this exposure. At a p/e of 11.1 and a growth rate no better than other huge oil companies I can find better value and better morals (if only slightly sometimes) picking other energy companies. The oil companies and the trailing P/E ratios of companies I do own are as follows:

Conoco Phillips (COP): 6.4
Occidental Petroleum (OXY): 8.0
Andarko Petroleum (APC): 5.2
Chevron (CVX): 8.9
BP - ADR formally British Petroleum (BP): 9.8
Statoil (Norwegan State Oil Co) (STO): 9.6

If Exxon were a real bargain, I'd hold my nose and buy it. Then I'd vote my proxies with some of the shareholder resolutions bent on trying to get Exxon management to behave themselves.

Disclosures and Confessions: Except for Exxon (XOM) I own and have traded in the last two years) all the stocks named above. If I were to sell any of the oil companies named above it would be Statoil first. I also own February 70 strike calls on Chevron. I may also liquidate the Chevron Calls as they approach expiration.

Comments

[Socialism c...:]

I like BP right now (disclaimer - I do own some)...the long term charts of all the major integrateds look roughly the same...yet the BP dividend yield is about 4% at current prices. They just raised it, so it's an obviously safe divy. Not to be sniffed at with current interest rates and yields elsewhere, and the potential for BP to rise as it sheds its troubles. All the negatives are pretty much priced in already, in my opinion.

2008 Feb 05 05:25 PM

[Tarik.ca:]

EnCana (TSE:ECA) provides the best value out of all the large cap Canadian energy companies. Unlike Exxon they still have growing boe production, they trade at 14 times earnings, 2.5 times book, while having 17% net profit margins and 20% return on equity. EnCana also has strong dividend growth, with dividends up 800% in the last 5 years.

For More Analysis Visit : Tarik.ca
A Canadian Financial Blog

2008 Feb 05 07:46 PM