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Your Top 10 Integrated Energy Stocks by Dividend Yield

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Part 5
Your Top 10 Integrated Energy Stocks by Dividend Yield PART 5 OF 11

Total’s Dividend Yield: 4th Place in the Top 10

Total’s dividend yield

Total (TOT) occupies fourth place in our group of top ten dividend-yielding integrated energy stocks. Total is a French integrated energy company with E&P (exploration and production), GRP (gas, renewables, and power), R&C (refining and chemicals), and M&S (marketing and services) business segments. The company’s market cap of around $129 billion places it in fifth place in size in our select group.

Total has a current dividend yield of 5.1%. In 3Q17, Total announced a dividend of 0.62 euros per share (or ~$0.74 per share at current exchange rates) on July 27, 2017, which will be paid on January 19, 2018, for ADR (American depositary receipt) holders based on the prevalent exchange rate.

Total’s Dividend Yield: 4th Place in the Top 10

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Total has paid dividends consistently for the past three years. Three years ago, Total’s quarterly dividend payment stood at 0.61 euros per share, and since then, its stock price has fallen 28%.

Latest 1H17 earnings

In its 1H17 results, Total posted a 25% YoY (year-over-year) rise in net adjusted operating earnings to ~$5.5 billion in 1H17. This was due to an increase in E&P, GRP, and M&S earnings, partially offset by a fall in R&C earnings.

Total’s E&P segment earnings grew 92% YoY to ~$2.7 billion in 1H17. This was due to a rise in average hydrocarbon realizations of 24% YoY, totaling $37 per boe (barrel of oil equivalent). Total’s hydrocarbon volumes rose in the first half of 2017, while its GRP and M&S earnings rose 34% YoY and 4% YoY, respectively. R&C earnings fell 12% YoY.

Valuations

Total is now trading at a forward PE (price-to-earnings) ratio of 12.6x—below the average of 21.5x in our peer group. Total is trading at a forward EV-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of 5.2x, which is below the peer average of 6.2x.

Total has a total-debt-to-total-capital ratio of 33%, which is higher than ExxonMobil’s (XOM) and Chevron’s (CVX) ratios of 18% and 23%, respectively. However, with the rise in earnings in 1H17 and divestment proceeds flowing in, Total has seen an increase in its cash reserves, which has led to a drop in its net debt in the current year. The company has been growing organically as well as inorganically in an effort to create a more robust portfolio.

Total (TOT) is one of the four stocks in our group—including BP (BP), Royal Dutch Shell (RDS.A), and Eni (E)—to have a higher dividend yield and a lower PE ratio.

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