John O'Connell, CFA
Statoil ASA
STO-N
DON'T BUY
Sep 16, 2014
They have talked about disposing of some of their assets after having made big acquisitions here. Norwegians are very environmentally conscious and he thinks they are getting sucked into the “dirty oil vs. clean oil” argument. It is hard to make a lot of money on these large quasi state run enterprises. It is very hard for them to show consistent production per share growth. If you have a really bullish view on energy prices, you probably want to have a reasonably bullish view on the Cdn$, so why would you be investing in energy names and using up your valuable foreign dollars, when you can buy good quality energy names in Canada.
Under performed in the last little while. Very reasonable multiple at 10X earnings. 5% yield. Large position in European natural gas has hurt them but even if they dropped their natural gas, it would only be down 5%.
Formerly entirely owned by Norway with most production out of the North Sea. Very attractive 4.5% dividend. Royal Dutch Shell (RDS.A-N) is a better operator with a better growth profile in LNG and Gas to Liquids.
Long-duration stock on oil. Has weakened with the price of oil. 4.6% yield is pretty fantastic. If oil goes up, this is the most well positioned play. On a risk-adjusted basis, this is a far better investment than the more speculative plays.
This is the most levered stock to oil. When oil falls, this one falls. The overall cash flow is pretty steady. He holds this one in his growth portfolios. Pays a great and consistent dividend. If you want exposure to the oil sector, this is the one you would own. He wouldn’t buy this one from a dividend perspective because dividend divided by volatility is not favourable to this company.
(Top Pick Jun 1/12, Up 1.61%) 5.5% dividend. Stock tends to move higher when oil moves higher. Good balance sheet and sustainable balance sheet. Can be bought when it drops into the low $20s.
Trying to transition themselves from a large cap into a mega-cap through aggressive expansion in both onshore and offshore oil exploration. Have been very successful in finding new oil reserves offshore in deep water. Good long-term story and a very good balance sheet. 5.1% dividend yield.
They have talked about disposing of some of their assets after having made big acquisitions here. Norwegians are very environmentally conscious and he thinks they are getting sucked into the “dirty oil vs. clean oil” argument. It is hard to make a lot of money on these large quasi state run enterprises. It is very hard for them to show consistent production per share growth. If you have a really bullish view on energy prices, you probably want to have a reasonably bullish view on the Cdn$, so why would you be investing in energy names and using up your valuable foreign dollars, when you can buy good quality energy names in Canada.