Alternative Foreign Oil And Gas Dividend Stocks
Oil stocks have been on the mind of many bloggers in recent months as many present decent value and low PEs in the high priced stock market of the day. Many domestic favorites include XOM, CVX, COP, PSX and OXY to name a few. On the foreign front, the oil companies that are getting the most attention seem to be BP, TOT and RDS.
There are many other foreign oil stocks that pay generous dividends as well and might deserve a spot in your portfolio. Just watch out for potential dividend cuts or eliminations. With that in mind, let’s begin our travel around the world looking at several dividend paying oil and gas stocks.
Our first stop is Italy and Eni SpA (E). Headquartered in Rome, Italy, E is involved in oil and natural gas exploration with operations around the world including Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Russia, Algeria, Australia, Venezuela, Iraq, and Mozambique. E currently yields a very generous 4.40% with a moderately high payout ratio of 60.2%. For now it seems that this dividend is safe with current cash flow but one must always be cautious, especially with many of the foreign oil stocks, and be on the lookout for potential dividend cuts such as what happened with PBR. E has a relatively low PE of 14.2 which is low compared to the S&P but slightly higher than its five year average and its peers suggesting the share price may have run a little ahead of fair value. E’s annualized dividend growth rate for the last ten years stands at a moderate 6.12%. Not exactly a gang-buster dividend grower.
Next stop on our world tour is Stavanger, Norway and Statoil ASA (STO). STO currently yields a relatively high 3.60% with a moderate payout ratio of 44.5%. Like E, STO is engaged in the exploration, production, transportation and refining of crude oil and natural gas mainly in the North Sea, the Norwegian Sea, and the Barents Sea. STO has a very low PE of only 10.05 which puts it well below the market in general and its peers. STO’s annualized dividend growth rate for the last ten years stands at a healthy 11.24%.
Next we are off to South America to visit Bogotá, Colombia and Ecopetrol SA (EC). EC is another integrated oil company, that engages in the exploration and production of crude oil and natural gas primarily in Colombia, Peru, Brazil and the United States Gulf Coast. EC currently yields a very high 6.20% with a moderately high payout ratio of 65.1%. The current PE of EC is only 10.5 which is well below its peers, the S&P and even its five year average PE. In fact the forward PE for EC is only 7.7 and it has a PEG of 0.9 suggesting this may be high yielding undervalued dividend stock at current levels. While EC has a shorter dividend history than the other stocks mentioned the five year annualized dividend growth rate stands at an eye popping 44.72%. EC is definitely one to look into more deeply.
Finally, our trip around the world takes us to Beijing, China and PetroChina Co. Ltd. (PTR). PTR produces and sells oil and gas in the People’s Republic of China. It also operates a network of service stations and oil and gas pipelines throughout the country. Currently yielding a healthy 3.60% with a relatively low payout ratio of 38.2%, PTR is another low PE foreign oil dividend stock at 11.3. The ten year annualized dividend growth rate for PTR is at a healthy 8.78%.
Clearly, there are many choices when looking for dividends overseas in the oil and gas sector. The above present some interesting choices for dividend investors as all have low PE’s relative to the market and may be considered undervalued at current levels. Also, the yields offered by these oil and gas companies can rival many of the MLPs or REITs many dividend investors are fond of.
Too often, as dividend investors, we get caught up in discussing many of the same dividend stocks over and over and neglect other dividend opportunities that may exist in particular sectors.
Do these foreign oil and gas stocks have a place in your portfolio? What energy stocks are currently in your portfolio?
Disclosure: Long NONE