Royal Dutch Shell plc (ADR) (RDS.A), Exxon Mobil Corporation (XOM): Is This Stable Mammoth About To Change?

This year, Total looks set for another year of lackluster growth, but there will be a significant cash-flow uplift when big projects start (Ichthys, GLNG, Angola) and the downstream improves. I should mention that Total is drilling in the highest number of frontier basins among Majors in 2013, and I would expect another dividend increase of 3.4% by year-end. Even with all of the above taken into account, Total looks cheap. I expect the company to pay a 6.2% dividend yield while it trades at 2013 5.4x EV/EBITDAX. The company its worth its price and it might be good to, so you should at least keep it on your watch list.

The three companies mentioned above are great companies. But while Exxon Mobil Corporation (NYSE:XOM)trades at what I consider an unjustified premium, Shell and Total trade at a discount to their peer group. Both Shell and Total are compelling opportunities, but I think there is more upside in Shell’s case given its valuation and its possible change in management’s direction. That said, in a zero interest rate world, they both offer cash dividends that are difficult to match.

The article The Oil Major’s Review originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.