Where there’s smoke there’s fire is the old saying. And in light of the rash of dividend cuts and severe selloff of higher yielding energy companies in the second half of 2018, it’s easy to conclude as many investors have that the entire sector is finished as an income source.
The irony is, capitulation is occurring at the same time business fundamentals appear to have bottomed and sector stock valuations are again probing depths last seen in early 2016. Even weaker companies have been systematically deleveraging and reducing their operating risk, while oil prices are roughly twice their low point of $26 and change.
There are almost surely some painful adjustments ahead. And the extremely high yields of 12 percent and higher attached to more than two-dozen stocks we track are a potential red flag. That’s why any high yielding energy stock you consider now should feature the following:
Your complete guide to energy investing, from growth stocks to high-yielders.
In October 2012, renowned energy expert Elliott Gue launched the Energy & Income Advisor, a twice-monthly investment advisory that's dedicated to unearthing the most profitable opportunities in the sector, from growth stocks to high-yielding utilities, royalty trusts and master limited partnerships.
Elliott and Roger on Nov. 26, 2019
Balanced portfolios of energy stocks for aggressive and conservative investors.
Our take on more than 50 energy-related equities, from upstream to downstream and everything in between.
Our assessment of every energy-related master limited partnership.
Roger Conrad’s coverage of more than 70 dividend-paying energy names.