TotalEnergies SE (TTE): A Bull Case Theory 

We came across a bullish thesis on TotalEnergies SE on Compounding Dividends’s Substack. In this article, we will summarize the bulls’ thesis on TTE. TotalEnergies SE’s share was trading at $72.40 as of January 30th. TTE’s trailing and forward P/E were 11.73 and 10.68, respectively according to Yahoo Finance.

TotalEnergies (TTE) is a French multi-energy major that combines the scale and cash generation of a traditional oil and gas producer with one of the most aggressive energy transition strategies among global peers. While hydrocarbons remain a core earnings driver, the company is deliberately redeploying cash flows from its low-cost upstream portfolio into a rapidly expanding renewables platform, positioning itself as a differentiated energy incumbent rather than a pure-play oil company.

Its oil and gas assets rank among the lowest-cost projects globally, giving TotalEnergies resilience across commodity cycles and the ability to remain profitable even in prolonged low oil price environments. This cost advantage underpins strong free cash flow generation, which management is actively channeling into long-duration growth investments rather than purely maximizing near-term distributions.

What makes TotalEnergies particularly compelling is the scale and ambition of its renewable buildout. The company is assembling a global portfolio of wind and solar assets with the explicit goal of becoming a top-five renewable power producer worldwide by 2030. This strategy allows TotalEnergies to gradually rebalance its earnings mix toward more stable, contracted cash flows while retaining exposure to upside from hydrocarbons during favorable pricing environments. Unlike many peers whose transition plans remain incremental or aspirational, TotalEnergies has already committed substantial capital and execution resources, making its transition path more credible and visible.

Despite these strategic advantages, TotalEnergies trades at a notable valuation discount relative to U.S. integrated majors such as Exxon Mobil and Chevron. This discount reflects broader skepticism toward European energy companies but appears inconsistent with TotalEnergies’ superior cost structure and more advanced transition strategy. As renewables scale and the company continues to demonstrate disciplined capital allocation, the market may begin to close this valuation gap, making TTE an attractive opportunity for investors seeking both cash flow durability and long-term energy transition exposure.

Previously, we covered a bullish thesis on Delek US Holdings (DK) by Matt Lindsay in May 2025, highlighting its Enterprise Optimization Plan, midstream deconsolidation, and logistics resilience. DK’s stock has appreciated by 50.10% since then. Compounding Dividends shares a similar focus on disciplined capital allocation but emphasizes TotalEnergies’ aggressive renewable transition and diversified energy strategy.

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Disclosure: None.