3 Energy Plays for Cash Flow: Buy 1 or Buy Them All Cash and capital returns are flowing in the energy sector. Volatility in oil prices aside, oil prices range above long-term averages, driving revenue, margin, and cash flow for energy companies. Uncertain outlook or not, the outlook for energy consumption supports the idea of higher prices. The world’s population is growing, modernizing, and industrializing, and the amount of oil left in the ground is finite. Worldometer estimates the amount of oil reserves to last less than 50 years and falling, leading to more than just higher oil prices. Today’s takeaway is that energy companies are investable again. They pay healthy dividends, most repurchase shares, and the long-term share price gains forecast is robust. OK, you're not supposed to say this
In fact, maverick investor Graham Lindman says it's become the silent elephant in the room that everyone is pretending isn't there.
But he just said it:
Most stocks suck.
And he isn't saying that figuratively or subjectively…
You see, 96% of stocks underperform. Just 4% of "Apex Stocks" generate virtually all the wealth. All you have to do is watch here for all the details. Kinder Morgan Invests in the Future of Energy: Natural Gas Kinder Morgan (NYSE: KMI) owns and operates a large and growing network of natural gas pipelines and storage facilities, which puts it in a good position for today’s markets. Natural gas demand growth is sluggish but positive and supported by the shift to greener energy. Natural gas isn’t green energy, but it is the greenest carbon-based energy and is central to decarbonization efforts globally. Today’s headwind is natural gas prices, which are low due to ample supply. The offsetting factor is Kinder Morgan’s position as a middleman, which provides a more stable revenue stream tied to fees for volume and storage. Kinder Morgan had a tough time in 2023 due to the deleveraging of natural gas prices but could sustain infrastructure growth and cash flow to pay the dividend. This year, the company forecasts a return to growth supported by price stabilization, expansion efforts, and demand growth. The dividend yields more than 6%, with the stock trading near the middle of a multi-year range. The payout ratio relative to earnings is high but irrelevant because of the MLP status. In this case, the distributable cash flow matters and the payout ratio relative to that figure is a sustainable 55%. Analysts sentiment has been steady for over twelve months. They see this stock trading above $20, outside its trading range, and 10% above current action. Occidental Petroleum is a Buffett-Buy That is Paying Off Occidental Petroleum’s (NYSE: OXY) share price rebounded from the bottom of its trading range in late December 2023. The rebound was sparked by another purchase by Berkshire Hathaway that was compounded by a solid report that included ample cash flow and improved shareholder value. Occidental isn’t paying a substantial dividend now; instead, it uses its cash flow to pay down debt, reposition the balance sheet in favor of shareholders, and free up cash flow. Cash flow aims to grow the business, positioning for long-term sustainability and shareholder returns. The dividend is healthy at less than 20% of earnings. The yield is about 1.25%, with shares near a fresh high, and the distribution can be expected to grow. Since reinstating the payment, the company made two regular increases, which were large, double-digit increases; another significant increase is likely at the end of the current fiscal year. Analysts have lifted the consensus sentiment for this stock to Moderate Buy from Hold and the price target back to $72. That implies a 5% upside, but the new high target of $90 is among the freshest revisions. It implies a 33% upside. Today I want to show you how our research shows you could've grown a $25,000 account into $109,616.12 within the last TWO months.
You see, former multi-million dollar hedge fund manager Roger Scott spent the better half of 2023 developing what might be the most advanced trading tool that exists…
It's a revolutionary software system that tracks the moves of institutional investors…. in real time… Go here to watch the most recent trading workshop video at no charge. Atlas Energy Solutions an Emergent High-Quality Dividend Atlas Energy Solutions (NYSE: AESI) quietly IPOd last year and has seen its share price advance 50% off the post-IPO low. The gains are driven by its position in the Texas oilfields and cash flow, allowing for a substantial dividend. Its position is that of a proppant provider. Proppant is sand used in fracking, and they use plenty of it. The dividend is worth 2.75%, with shares near record highs, and it is a safe payment. The payout ratio is less than 25%, and earnings are expected to grow more than 50% on a 15% increase in revenue in F2025. Six analysts rate this stock as a Buy and see it trading at $25. $25 is only 6% above the current action but a new all-time high that could lead to a sustained rally in this stock. It trades at only 10X this year and 6X next year’s earnings, which is a deep value. Written by Thomas Hughes Read this article online › Further Reading: |
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