(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.