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Is This European Oil Company Superior to Its American Competitors? – TOTAL S.A. (ADR) (TOT): Chevron Corporation (CVX), Exxon Mobil Corporation (XOM)

TOTAL S.A. (ADR) (NYSE:TOT) is a European oil company with activities in exploration and production (upstream) and also the refining of petroleum (downstream) worldwide. The business produces around 85% of its revenue through the upstream industry. What is unique about this company is its remarkably small P/E ratio of 7.1, as well as its substantially high dividend yield of 6%. This possibly could direct someone to assume it will become more lucrative to buy shares in Total compared to Chevron Corporation (NYSE:CVX) or Exxon Mobil Corporation (NYSE:XOM), companies that have larger P/Es (8.7 and 9.2, respectively) and around 50% of Total’s dividend yield (3.1% and 2.6%, respectively). The previously mentioned numbers can make a person speculate why the vast majority of investors choose the two North American giants over Total.

A Growth Summary

TOTAL S.A. (ADR) (NYSE:TOT) is a value play while Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) possess substantial growth. Total has expanded its EPS (earnings per share) by just 7% since 2005 while Chevron and Exxon raised their EPS by 108% and 64%, respectively. That is the reason Total’s share price has dropped 23% following the end of 2005 while Chevron and Exxon have increased their share prices by 96% and 50%, respectively. Total has grown its dividend by 45% from 2005 while Chevron and Exxon have multiplied their dividend by 2 around the same period.

In addition, TOTAL S.A. (ADR) (NYSE:TOT) possesses a small net debt that happens to be around 4 times its per year revenue. This is just a bit above the financial debt of Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) (2 and 3 times their income per year, respectively).

Oil Reserves

While Chevron and Exxon Mobil Corporation (NYSE:XOM) replaced 112% and 119% of their reserves respectively, Total replaced just 93% of its oil reserves in 2012. Furthermore, Total possesses 13 years of established reserve life, which happens to be similar to Exxon (15 years) although less than 50 % of Chevron’s number (30 years).

TOTAL S.A. (ADR) (NYSE:TOT)’s approach is to enhance its production level by 3% on a yearly basis within the 2011-2015 period. The company can expect its 2013 production to become powered by the start-ups in 2012 as well as 2013, which includes Kashagan in Kazakhstan, Angola LNG, Anguille in Gabon, and also the expansion of OML in Nigeria.