Royal Dutch Shell PLC (B) (RDS.B)

If he owned a portfolio where he could go anywhere in the world, and he was bullish on oil, this one would be a holding. Dividend yield of about 7.5%.

Thinks the 7.4% dividend is secure because the super majors prioritize dividends, even over capital expenditures. There is still a lot of cost-cutting to be done. You want to consider what kind of growth that they may or may not be able to generate, compared to some of the smaller companies. Probably not a bad one to continue to own.

One of the best managed energy companies in the world. Very little debt. They took advantage of energy prices to integrate an acquisition with a high yield. There is not a lot of downside for the high dividend yield.

Of all the majors, this has been the big under performer in the last year being down 21%. It is a major player on LNG, which seems to be the major way the energy sector is going. Dividend of 7.5% and have said they are going to maintain that. Cheap at the moment.

Taking cash flow from operations, minus capital expenditures and minus dividends, the consistency is really with Exxon Mobil (XOM-N) rather than this company. The biggest concern is the glut of supply. Exxon Mobil will probably be shut out of Iran whereas Total (TOT-N) and Royal Dutch Shell will have access to the Iranian oil fields. There are opportunities there, but the issue that occurs is that you have a glut of supply right now and the CapX is being cut back in a huge way. The dividend will probably not be growing over time. Keep an eye on companies that are making acquisitions now, because they are being counter cyclical. That would be the more interesting play.

Just agreed to buy BG Group. BG’s dividend is higher, so by moving it into this company, they are going to save some money. The dividend is definitely sustainable. This is a good place if you just want large cap, but it really hasn’t done much over the last decade. There are other places where you can find better per share growth.

British Petroleum (BP-N) or Royal Dutch Shell (RDS.B-N)? If you are looking for as much safety as you can in the commodity sector, this one has the best balance sheet of the 2. If you want a little more volatility, British Petroleum would be the one. He likes both companies.

Commodities are so beaten up in general, and if you are going to buy an energy name at this point in the cycle, you want to buy the one with the best balance sheet with a very good management team, and diversified operations. This is on sale right now. He expects dividend growth as well. Yield of 5.34%.