Anyone who's been following me for a while knows that I'm hot on traditional energy, both as a trading vehicle and an investing staple. Rising demand coupled with rapid shifts in global supply have created amazing opportunities in this space, and we're decades away from the renewable future. That means for now, oil and gas are still king.
For long-term energy plays, my rubric is pretty simple - strong balance sheets, high dividends with lots of money available to common shareholders, and room for growth potential in both the stock price and the dividend payments.
So when my research reveals a company that not only checks off all the boxes, but excels at them... well, I have to make sure you know about it.
I'm talking about a hydrocarbon exploration, development, and production company out of Houston boasting almost a $19 billion market cap and over $9 billion in TTM (trailing 12-month) revenue. That sounds impressive, but what really interests me is the profit margin on that revenue - a whopping 45.5%.
And it gets even better when you look at it through the lens of income investing. $4.13 billion available to common shareholders, which they've used to fuel almost a 10% dividend over the course of the past year. But while other companies are leaning on debt to maintain yields that high, this firm is doing it with just 40% of their available net income. That means there's plenty of room for them to increase that dividend in the future.
I just can't think of a better combo right now for you to throw in $100, or $1000, or whatever you've got... and take it to the bank.
Check out the video for the ticker and my full breakdown:
One of the tailwinds behind this stock is its presence in the Permian Basin, where some of the biggest moves in oil are happening that we've seen in over a decade. The largest oil and gas companies are pushing for access to the region, and they're throwing huge amounts of capital down in a land rush with trillions of dollars in assets at stake.
One of my colleagues is tracking five imminent deals, any of which could be the next one to hit. Any of them could happen at any moment, and any of them could potentially double or triple returns in one shot.
You want to be on board before they do. Get all the details here...
The post Soaring Profits and High Dividends Make This Energy Stock a Must-Buy appeared first on Total Wealth.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.