BP plc (ADR) (BP), TOTAL S.A. (ADR) (TOT), Royal Dutch Shell plc (ADR) (RDS.A): European Oil Stocks Are a Haven For Income Seekers

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) had a difficult quarter itself, but don’t be fooled: the long-term fundamentals of its business are sound. The company’s poor quarter was due largely to attacks on its operations in Nigeria, in addition to a significant writedown of its North American shale oil fields.

Short-term struggles haven’t discouraged management from increasing shareholder rewards in recent periods. Royal Dutch Shell plc (ADR) (NYSE:RDS.A) upped its already-generous dividend earlier this year. Likewise, TOTAL S.A. (ADR) (NYSE:TOT)’s steady production allowed it to increase its quarterly dividend by 3% in euros per share, year over year.

The Foolish bottom line
Investors looking for solid income in today’s market of low interest rates and rising stock prices can find a dividend haven in the form of European energy majors. Securing a well-cushioned 5% yield is hard to do these days, so these stocks may be especially attractive for investors looking to derive meaningful income from their stock investments.

BP plc (ADR) (NYSE:BP) is the riskiest play at this point, due to its precarious position of likely paying billions more in damages stemming from the 2010 Gulf of Mexico spill. The Gulf spill required BP to suspend its dividend, which likely left a bad taste in investors’ mouths. At the same time, BP has not only resumed dividend payments, but increased its payout at much faster rates than Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and TOTAL S.A. (ADR) (NYSE:TOT) in recent years.

Meanwhile, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and TOTAL S.A. (ADR) (NYSE:TOT) offer comparable dividend yields as BP but without the near-term headline risk. While I believe all three stocks will reward investors handsomely over the long-term, risk-averse investors should probably prefer Royal Dutch Shell and Total in the current environment.

The article European Oil Stocks Are a Haven For Income Seekers originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura owns shares of BP p.l.c. (ADR). The Motley Fool recommends Total SA. (ADR).

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