Energy Business

Oil Is Heading to $85: 4 Big-Dividend Mega-Cap Integrated Stocks to Buy Now

Exxon Mobil

Shares of this mega-cap energy leader backed up nicely as oil sold off in August, and they still offer investors an incredible entry point. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

Exxon also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

The company announced last month that ExxonMobil Catalysts and licensing has introduced ExxonMobil Renewable Diesel (EMRD) process technology to help meet the evolving needs for mobility, while utilizing renewable feedstock. This new process technology converts feedstocks including, but not limited to, vegetable oils, unconverted cooking oil and animal fats, into renewable diesel. Due to significant interest in producing renewable jet fuel as a primary product, Exxon is also developing advanced catalyst and process technology solutions that will offer EMRD process licensees flexibility to tailor the amount of jet fuel versus diesel produced.

The company pays investors a huge 5.51% dividend, which will continue to be defended. The massive $90 BofA Securities price target on Exxon Mobil stock is well above the consensus target of $68.40. The shares closed trading at $63.12 apiece on Friday.

TotalEnergies

This French integrated giant is another great way to play the energy rally from the European side. TotalEnergies S.E. (NYSE: TTE) operates as an integrated oil and gas company worldwide. Its Exploration & Production segment is involved in oil and natural gas exploration and production activities in approximately 50 countries.

The company’s Integrated Gas, Renewables & Power segment engages in the LNG production, shipping, trading and regasification activities; trading of liquefied petroleum gas (LPG), petcoke and sulfur, natural gas and electricity; transportation of natural gas; electricity production from natural gas, wind, solar, hydroelectric and biogas sources; energy storage activities; and development and operation of biomethane production units, as well as provides energy efficiency services.

The Refining & Chemicals segment is involved in refining petrochemicals, including olefins and aromatics; and polymer derivatives, such as polyethylene, polypropylene, polystyrene and hydrocarbon resins, as well as biomass conversion and elastomer processing. This segment also engages in trading and shipping crude oil and petroleum products.

The Marketing & Services segment produces and sells lubricants; supplies and markets petroleum products, including bulk fuel, aviation and marine fuel, special fluids, compressed natural gas, LPG and bitumen; and provides fuel payment solutions. It operates approximately 15,500 service stations.

Investors receive a stellar 5.04% dividend. Piper Sandler analysts have set a $66 price target. The posted consensus target for TotalEnergies stock is $59.38. The shares closed most recently at $51.16.


All of these mega-cap integrated leaders pay very solid dividends and their stocks have some serious upside to the various price targets. Plus, they all dominate in their geographical locations and perhaps offer more safety for investors with less risk tolerance.

One caveat for investors considering the two European ideas is that many foreign governments automatically withhold taxes on dividends paid by companies incorporated within their borders. This means that a certain percentage of your dividend may be withheld by your broker.

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