Like Chevron, ExxonMobil has also paid increasing dividends. ExxonMobil’s dividend increased from $0.98 per share in 2003 to $2.18 per share in 2012. Its payout ratio has also been quite conservative, fluctuating in the range of 22% to 41.7%. In 2012, its payout ratio stayed at 22.5%.
Chevron is trading at nearly $116 per share, with a total market cap of $224.6 billion. The market values Chevron at only 4.6 times EV/EBITDA. ExxonMobil seems a bit more expensive. At $87 per share, its total market cap is $388.2 billion. It is valued at around 5.3 times EV/EBITDA.
If investors want to look at a much smaller energy company being valued at quite low valuation, they should look at Apache Corporation (NYSE:APA). The company’s total proved reserves are around 2.9 billion BOE, with 28% of that in the U.S. Permian Basin. Apache could be considered a good opportunistic stock to play the Permian-area as it is considered the most active company there with around 38 operating rigs.
From the dividend standpoint, Apache Corporation (NYSE:APA) is also a consistent dividend payer. Its dividend rose from $0.21 per share in 2003 to $0.60 per share in 2012. What makes me interested is that Apache seems to be much more conservative in terms of dividend policy compared to Chesapeake Energy Corporation (NYSE:CHK) and ExxonMobil. Since 2010, its payout ratio has fluctuated within a range of only 5.2% to 13.4%.
At $71 per share, Apache Corporation (NYSE:APA) is worth around $27.8 billion in market capitalization. The company is valued at only 3.4 times EV/EBITDA. At its current trading price, its forward dividend yield is only 1.1%, the lowest among the three companies.
While ExxonMobil offers investors dividends with a yield of 2.6%, Chevron’s dividend yield is the highest at 3%. Interestingly, Brian Rogers is also bullish on Apache Corporation (NYSE:APA). He currently holds around 5 million shares in the company, accounting for 1.5% of his total portfolio as of March.
My Foolish take
With global leading positions in the oil and gas sector, both ExxonMobil and Chevron Corporation (NYSE:CVX) are the good stocks for investors to hold in their income portfolios in the long run. Although Apache Corporation (NYSE:APA) does not provide investors the same dividend yield, its payout ratio is much smaller. With good assets, a conservative payout ratio and quite a low valuation, Apache Corporation (NYSE:APA) is also a good opportunity for investors at its current price.
The article Three Oil and Gas Stocks to Buy Now originally appeared on Fool.com is written by Anh HOANG.
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