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02-07-2020, 09:33 PM
(This post was last modified: 02-07-2020, 09:34 PM by vbin.)
(02-07-2020, 09:09 PM)fenders53 Wrote: (02-07-2020, 08:05 PM)vbin Wrote: I have been debating to add XOM in my kids account( I am already ankle deep into it in my account) and trying to study on future energy demand outlook and what role oil and natural gas are going to play. ( I am 90% convinced that XOM is a great buy at current prices for the next decade to come,not so sure about the next to next decade).
As part of this research the other name which came up strongly is BP. Found their official channel on YouTube. Here is a link if anyone is interested https://www.youtube.com/user/BPplc. They also have bunch of other links mention on their website which were quite interesting.
What folks here think about BP vs XOM? Also would love to hear some investment worthy renewable energy companies from future growth prospective since that's definitely seems to be an area which will keep growing.
Maybe transfer some XOM to your kid's account, or do a real quick buy and sell in both accounts so you don't end up with more XOM unless that's what you really want? A long term account like that could use some reliable growers, or at least some growth to fund the Div longer term.
You know my opinion of BP but I'll expand in generalizations. I haven't looked at updated financials since the latest earnings report. I do hope to hear dissenting opinions. I don't come here to get internet high fives lol. And I am not thrilled with oil at all right now. You'll have that when the market hates them.
Haven't read your link yet but I definitely will, but IMO and overall, BP is marginally better for the following reasons, heavy emphasis on my opinion.
-While they both have good balance sheets, XOM is throwing down on future supply in Africa, as if that is somehow necessary anytime soon. That mystifies me. We have large ooil producers off the market due to sanctions. That doesn't last forever. We are late cycle IMO and that balance sheet could suffer some. All the majors are blowing earnings YOY now. Maybe they do need more oil next year? Or are they just helping to drive down oil prices further? Maybe increase capacity by buying dying small companies for 25% of value. The little guys with debt are already in trouble and the economy is doing OK.
-BP is making some investments in green energy. Bio-fuels, windmills, solar and such. Yes they are small investments in small companies for now. Are they doing it because they are London based and forced to for political reasons? Maybe so, but that is their reality in Europe. It will be the part of the future that is almost certainly growing. OMG they are talking about banning ICE vehicles soon. That's crazy but they may start taxing dirty vehicles. We'll see. Now I'm not delusional, these green investments are not going to add much revenue for now. They can sit on their hands like Ford and GM have done until recently. Show me some evidence XOM is making a move? They do have a few cool slides on their website. The math works for natty gas. It's free and nothing is more efficient. But is it just about the math? A Tesla is about as green as the nearest power plant. IMO it's a green farce for now and it doesn't seem to matter at all. I don't think it will matter anytime soon, if ever.
-BP had a horrible accident in the gulf in 2010. They have been paying off a huge fine since then. Multli-billions per year. That cost finally goes under $1B this year. That's a real big deal. It's been choking them for a decade. They had to learn to be operate austere. That has a lot to do with their conservative CAPEX. More cash to pay that near 7% Div. They just raised it again.
-Final thought, these oil majors all pay awesome Divs currently. I think it's starting to look a little sketchy if earnings keep dropping. That is much of why share prices are dropping. Well that and funds are being pressured to get out of fossil fuels. More politics but it's our reality. I don't want to see worldwide industrial production have a recession. Bottomline is I don't care what any of these majors did the last 30 years. It means nothing to me now.
-Need further evidence that making the green transition can be profitable because you are backed politically. Have a look at most all of the successful UTEs. Getting greener every year. Yes they are regulated. Did you notice how fast coal is dying? In much of the world oil is soon to face the same pressure IMO.
-I don't much care what S.A. oil bulls are preaching. They've been wrong for 10 years and I lost money listening to their advice. Please somebody tell me why it's different now? Anybody think I am a lefty DEM yet? You'd be wrong to think that. I'm just keeping my eyes wide open, cashing my Div checks from BP and ETF BGR (owns all the majors for diversification), and definitely holding my breath for now. Doesn't matter if I am wrong for a week or a month when oil spikes, and it will. I'm not here for a month.
Thank you. You mention some really good points. Thank you for being the point to transfer stock or do an exchange kind of trade between account. I did not think about it.
Talking about coal: I hear a lot about coal consumption going down as well but then I came across this resource and atleast as per this source, coal consumption isn't going down as fast as we think yet. https://youtu.be/ELYeTo2HqYY.
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02-07-2020, 09:48 PM
(This post was last modified: 02-07-2020, 09:52 PM by fenders53.)
What's a three year stock chart on a major coal company look like? That's not a wise remark, as I truly don't know the answer. That might be a reality check. I do know some major UTEs are accelerating their previous closure schedule for coal fired plants. By years in some cases. You follow XEL? They are 20% renewable now and ahead of schedule. Plan is 100% green by 2050. Seems optimistic but they are making progress in a hurry. I think they will be near 100% natty gas and renewables this decade.
We have a new speculative stock thread. We should combine efforts and dissect some green stocks there, I bet they look very speculative at this time. and TEVA info as well.
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(02-07-2020, 09:48 PM)fenders53 Wrote: What's a three year stock chart on a major coal company look like? That's not a wise remark, as I truly don't know the answer. That might be a reality check. I do know some major UTEs are accelerating their previous closure schedule for coal fired plants. By years in some cases. You follow XEL? They are 20% renewable now and ahead of schedule. Plan is 100% green by 2050. Seems optimistic but they are making progress in a hurry. I think they will be near 100% natty gas and renewables this decade.
We have a new speculative stock thread. We should combine efforts and dissect some green stocks there, I bet they look very speculative at this time.
Thank you bringing in XEL, I will check them. May be in developed countries coal consumption is going down after than rest of the world. Good pointer. Let me do some more research on that. I do think that rise and decline of oil will be fairly similar to coal after next couple of decades.
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02-07-2020, 10:18 PM
(This post was last modified: 02-07-2020, 10:20 PM by fenders53.)
Don't be buying any Utes right now on account of me LOL. I'm in DEEP and have owned XEL since it was about $7.50 but they have much higher PEs than CSCO and a bunch of other growthier stocks. That won't last forever. If you aren't in already buy a few shares of the best and wait for a much better time. There are maybe six big Utes that are killing it and transitioning cleaner fast, and greener as they can.
BTW My thesis is not that oil is going to decline. Not at all!!! But is it going to grow slowly while it continues to be easy to over supply? It's not even arguable that is gong on right now, and it's the problem with SPs for years. They can bring it to market cheaper every year and at least at break even. That's probably good because we are pretty much at 1990's gasoline prices again if you don't live in a socialist state where the taxes are stupid high and getting worse every year.
crimsonghost747
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(02-07-2020, 09:09 PM)fenders53 Wrote: Need further evidence that making the green transition can be profitable because you are backed politically. Have a look at most all of the successful UTEs. Getting greener every year. Yes they are regulated. Did you notice how fast coal is dying? In much of the world oil is soon to face the same pressure IMO.
I'd just like to touch on the subject that oil and renewable electricity, as in wind/solar etc, have about zero overlap. Do not confuse energy and electricity. About 1% of oil usage in the US is for electricity generation. I expect the rest of the world to be more or less around the same levels. Oil just hasn't been used for electricity generation for years, so the main argument for "green electricity" replacing oil is indeed with electric vehicles. Will that happen in a large scale? In Europe, yes. In the USA, I wouldn't be so sure. In Africa, Asia? Hahah yeah not in our lifetime.
And yes, coal is dying IN THE WEST because of governments outright banning it, or finding alternative ways (taxes) to cripple it. That's the only reason. Worldwide consumption of coal has remained pretty balanced these past few years, mainly due to China's huge increases.
But my point is that even with the current climate frenzy and western governments making massive political moves to "go green", all of this has very limited impact on the demand for oil.
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02-08-2020, 08:41 AM
(This post was last modified: 02-08-2020, 08:43 AM by fenders53.)
(02-07-2020, 11:57 PM)crimsonghost747 Wrote: (02-07-2020, 09:09 PM)fenders53 Wrote: Need further evidence that making the green transition can be profitable because you are backed politically. Have a look at most all of the successful UTEs. Getting greener every year. Yes they are regulated. Did you notice how fast coal is dying? In much of the world oil is soon to face the same pressure IMO.
I'd just like to touch on the subject that oil and renewable electricity, as in wind/solar etc, have about zero overlap. Do not confuse energy and electricity. About 1% of oil usage in the US is for electricity generation. I expect the rest of the world to be more or less around the same levels. Oil just hasn't been used for electricity generation for years, so the main argument for "green electricity" replacing oil is indeed with electric vehicles. Will that happen in a large scale? In Europe, yes. In the USA, I wouldn't be so sure. In Africa, Asia? Hahah yeah not in our lifetime.
And yes, coal is dying IN THE WEST because of governments outright banning it, or finding alternative ways (taxes) to cripple it. That's the only reason. Worldwide consumption of coal has remained pretty balanced these past few years, mainly due to China's huge increases.
But my point is that even with the current climate frenzy and western governments making massive political moves to "go green", all of this has very limited impact on the demand for oil.
Crimson, agreed and sorry if I am confusing the issue by injecting Utes into the discussion. It was intended to be an example of how fast the move to green can cause change in an industry. Natty gas has half the carbon emissions of coal. It's also abundant and expected to remain so. Wind and solar may never be as cost efficient as fossil fuels, but less emissions. So the conversion is happening, and a little faster than most thought possible. It doesn't matter if one believes in climate change. The world does, and we make money in stocks by understanding trends and investing accordingly. Not by yearning for XOM's stock performance a few decades ago to return. A TSLA is actually powered by natty gas and coal, majority anyway. Doesn't matter. See stock multiples for confirmation.
All of this is interesting, and confusing. Now back to supply and demand for oil because that is what keeps our oil majors where they are for many years on end.
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Not worried about electric cars taking over anytime soon. For reasons in the link below and concerns ogf the grid supporting a massive number of electric cars.
https://apnews.com/04029bd1e0a94cd59ff9540a398c12d1
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02-08-2020, 06:15 PM
(This post was last modified: 02-08-2020, 06:15 PM by fenders53.)
(02-08-2020, 06:07 PM)NilesMike Wrote: Not worried about electric cars taking over anytime soon. For reasons in the link below and concerns ogf the grid supporting a massive number of electric cars.
https://apnews.com/04029bd1e0a94cd59ff9540a398c12d1
I don't think anybody is anytime soon. Cheap oil now and EVs barely exist yet seems to be the near-term problem.
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If anybody cares, I started a thread in off topic to discuss electric cars and some thoughts I have had after 19 months of ownership.
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Purchased some DOW over the weekend. An exercised put I previously sold actually. Guess my DOW entry is $48. I am very underweight materials stocks.
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As long as Nat gas is under 2 and crude is under 50, oil stocks are overpriced even if they look cheap on paper. The size of the dividend is meaningless if they have to borrow from equity to pay it. Nat gas may find a bottom down the road buy there is no hurry to buy the OXY and XOM of the world. However I do continue to add to BP as I feel they are headed in the right direction with some recent purchases in the renewable energy field. I do have oil stocks on my watch list but I’m not adding anymore into that sector util I see some positive news.
To me the play is in renewable energy stocks. I have added 6 names in that space as I think they are the future. A few months back I bought NEE, NEP, ORA and TERP.
Today I bought BEP and PEGI. BEP to me is like NEE was a few years back.
Is anyone else in this space?
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