Transocean is the one who took a real hit after the disaster. The firm ran the rig that blew out and saw eleven people killed on its watch. It’s also been involved in the finger pointing as everyone involved in any way has been trying to pin it on someone else. Still, Transocean was the company on the scene when things went wrong, and that’s hasn’t done it any good at all.
Immediately following the blowout in the gulf, Transocean’s shares dropped more than 47% and have never substantially recovered. In early 2011 it climbed into the 80s but dropped again and now sit in the low 50s. Not a pretty sight for investors. There’s no dividend on a regular basis and there’s going to be a lot more negative publicity for the firm as the new trial gets media coverage. Avoid.
Royal Dutch Shell plc (ADR) (NYSE:RDS.A)
Why am I including Royal Dutch Shell? Not because they’re involved in the case but because they’re making a statement and attempting to expand their drilling in the gulf. That, combined with the world’s continuing appetite for oil in all of its uses, shows me that not everyone is crying in the corner about drilling. With new wells planned in the gulf, RDS is hoping to profit off that need.
Shares in RDS have been largely flat for the last year, trading within a tight range of $60.62 – $74.09 and currently sitting around $66. Still, the prospect of new wells and new reserves would be a good thing for the company. And it does return value to investors with a great 5.21% dividend yield. There’s no way I can argue with that. I think if you’re investing for income, RDS could be a very good choice for you right now.
Look, best guess is that BP tries put all of this behind itself with some whopping big settlement. It’ll take time to get there, but that would be best for the firm. Still, while the settlement is being worked out BP, Halliburton and Transocean are all going to be in the news in about the most negative fashion they can be. So shares in all of them are liable to be volatile for a while. Be cautious when approaching investing in them and don’t expect a quick payoff.
Follow Nate on Twitter: @natewooley
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The article BP, Deepwater Horizon and Accountability, Should You Fret? originally appeared on Fool.com and is written by Nate Wooley.
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