Energy Sector Stocks Flush With Cash Amid Oil's Bear Market: Is There A Buy Signal In Sight?
Portfolio Pulse from Surbhi Jain
Oil majors like Exxon Mobil, Shell, Chevron, TotalEnergies, BP, and Equinor are flush with cash despite the oil bear market. Exxon and Chevron are pursuing all-stock acquisitions, with Exxon buying Pioneer Natural Resources and Chevron acquiring Hess. These companies have healthy covered ratios, indicating their ability to service debt. Share buybacks are in focus, with Exxon and Shell announcing significant programs. Investors are eyeing potential shareholder returns and considering the attractive P/E multiples as a possible buy signal for these stocks.
December 13, 2023 | 6:59 pm
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POSITIVE IMPACT
BP's cash reserve and covered ratio suggest it can meet financial obligations. With the industry focus on shareholder returns, BP might announce similar measures.
BP's ability to service debt and the current industry focus on shareholder returns could lead to positive actions like buybacks, potentially raising its stock price.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Chevron, with its cash reserves, is acquiring Hess in an all-stock deal. Investors may expect similar shareholder return actions as seen with Exxon and Shell.
Chevron's all-stock acquisition and the current trend of share buybacks in the industry suggest that it might follow suit, which could lead to a positive short-term impact on its stock price.
CONFIDENCE 75
IMPORTANCE 65
RELEVANCE 75
POSITIVE IMPACT
Equinor's cash reserve and covered ratio are healthy. Market trends suggest it may also engage in shareholder return strategies, impacting its stock positively.
Equinor's financial health and the trend of share buybacks in the oil sector could lead to similar actions by the company, which would likely be well-received by the market.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Shell has a significant cash reserve and has announced a $3.5 billion share buyback program, which could positively impact its stock price in the short term.
Shell's announcement of a share buyback program is a direct return to shareholders and can be seen as a positive move, likely to increase investor confidence and potentially the stock price.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
TotalEnergies has a substantial cash reserve and a healthy covered ratio, indicating financial stability. Investors may anticipate shareholder-friendly actions.
TotalEnergies' financial stability and the industry trend towards shareholder returns could mean potential buybacks or dividends, positively influencing its stock price.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 60
POSITIVE IMPACT
Exxon Mobil has a strong cash position and is acquiring Pioneer Natural Resources in an all-stock deal. It has also increased its share buyback program, which could be accretive to its stock price.
Exxon's robust cash position and proactive shareholder return actions, such as increased share buybacks, are typically viewed positively by investors and could lead to a short-term uptick in stock price.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90