Prepping for Expensive Oil

Apr. 01, 2011 4:45 PM ETTTE, XOM, COP, CVX, OXY, KOG, SSN, AXAS, ROYL, BDCO, PARR

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Predictions on future oil costs have gone crazy. Some are stating it could reach approximately $300 per barrel. This estimate seems a bit exaggerated to me, but why not be prepared? Despite the fact most oil stocks have been successful recently, there are always those unpredictable and inconsistent stocks to steer clear of.

Total (TOT) which is based in France and trades for about $60. Total has a strong balance sheet which as of December 31, 2010 had roughly $19 billion in cash and cash equivalents. Total reported fourth quarter profits of about $1.54 per share and 2010 profits of about $6.08 per share. TOT earnings estimates are around $7 per share for 2011. The dividend yield on TOT is about 4.5%. I would buy this when the stock and/or oil corrects.

Exxon Mobil, Inc. (XOM) shares trade for $82.73, the dividend is $1.76, the yield is about 2.1%. The earnings per share estimate is $7.17 for 2011 and $8.09 for 2012. I would buy XOM on corrections.

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