TOTAL S.A. (ADR) (NYSE:TOT) pays the highest dividend among the oil and gas Supermajors, paying investors an impressive 6% dividend yield. Other notable Supermajors include BP plc (ADR) (NYSE:BP), Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM) and ConocoPhillips (NYSE:COP).
Total is a France-based integrated international oil and gas company, operating in over 130 countries and across all aspects of the petroleum industry, upstream and downstream.
Even more impressive is that TOTAL S.A. (ADR) (NYSE:TOT) produces base chemicals, has interests in coal mining and power generation, and is also active in solar-photovoltaic power.
Another big plus is that Total has one of the best production growth profiles among the oil Supermajors, with impressive exposure to the growing hydrocarbon producing regions of the world, and the lowest exposure to the mature North American region.
Total is looking to continue its expansion, even with its already diversified production profile. For 2012, the company’s top three production areas were Africa (31% of total production), the Middle East (21%) and Europe (19%).
TOTAL S.A. (ADR) (NYSE:TOT) has a solid balance sheet and cash flow, having generated $28.9 billion in cash flow from operations in 2012, a 15% increase year over year. The oil and gas company also lowered its debt level in 2012, with net debt-to-equity down from 23% in 2011 to 21.4% as of the end of 2012.
As far as hedge fund interest, what’s interesting is the conviction that a few hedge funds have. These include International Value Advisers and Astenbeck Capital, with 6.4% and 9.2% of their public equity portfolio invested in the company, respectively. As well, Seminole Capital added Total to its portfolio during the fourth quarter, and the company now makes up 5.8% of its portfolio (check out Seminole’s energy picks).
Other Supermajors
Unlike Chevron’s focus on downstream operations, Exxon Mobil Corporation (NYSE:XOM) is looking to benefit from upstream growth opportunities in the deepwater and onshore unconventional plays. As well, the company plans to embark on further expansion activities into the global LNG market.
Including its non-consolidated equity interests, its proved oil and gas reserves are a diversified mix, with 51% weighted toward liquids. Exxon expects production to fall 1% in 2013, but grow 2%-3% per year in 2013-2017. What’s more is that the oil and gas company replaced 115% of its 2012 production. Its dividend yield is 2.6%.
Despite a 6% fall year over year in production during full year 2012, fourth quarter production was up 8% sequentially, and EPS came in at $2.20, compared to $1.97 in the same quarter last year.
Billionaire Ken Fisher is a major investor in both Chevron and Exxon Mobil Corporation (NYSE:XOM) as of the end of 2012. Fisher has 1.1% of his public equity portfolio invested in Chevron and 1.15% in Exxon (check out Fisher’s cheap picks). However, Exxon has one of the most famous billionaires as its top hedge fund owner. Bill Gates Foundation owns over 7.6 million shares — 3.94% of its portfolio (see Gates’ top picks).
ConocoPhillips (NYSE:COP) spun off its downstream (refining) operations back in 2012, which now trades as Phillips 66 (check out the value in refining). The stock is now a standalone exploration and production company. ConocoPhillips is nearing completion of its three-year portfolio optimization plan and is also finishing up $9.6 billion in asset sales to help fund its $15 billion capital expenditure plan, pay dividends of $3.5 billion and $5 billion in stock buybacks.
ConocoPhillips’ $15 billion CapEx plan is one of the highest among Supermajors, but it will play a key role in its reserve replacement target of over 100%. Around 60% of CapEx is planned for North America liquids-rich plays, including its acreage portfolios in the Eagle Ford Shale, Permian Basin and Bakken Shale. ConocoPhillips pays a robust dividend yield of 4.6%, but still well below Total’s.
Don’t be fooled
Total pays the most robust dividend yield among all the Supermajors. What’s more is that it has a very reasonable payout ratio, at only 48%.
| TOTAL | BP | Chevron | Exxon Mobil | ConocoPhillips | |
| Dividend yield | 6.0% | 4.5% | 3.1% | 2.6% | 4.6% |
| Dividend payout ratio | 48% | 54% | 26% | 23% | 44% |
The story gets even better. The stock is the cheapest among all Supermajors.
| TOTAL | BP | Chevron | Exxon Mobil | ConocoPhillips | |
| Forward P/E | 7 | 8 | 10% | 10.5 | 10 |
I like TOTAL S.A. (ADR) (NYSE:TOT)’s impressive dividend yield, especially when coupled with its “cheapness.” The stock should perform well on the back of a rebounding global economy and has over $21 billion in cash on hand, or $9.50 per share, giving it room to up its dividend over the interim.
The article This Supermajor Pays a Super Dividend originally appeared on Fool.com.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
