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The Largest Oil and Gas Dividend Stocks

Back in October 2014, oil’s decline was well underway, and I wrote about how investors can get exposure to Canada’s energy industry.  The article included strategies such as buying energy mutual funds, ETFs that index energy markets, and buying individual companies (stocks).

Some readers have emailed me to elaborate on individual oil and gas dividend stocks.  At the moment, with oil trading around $50, it is a gut wrenching time to be invested the oil and gas industry.  While the big blue chip oil and gas companies are holding their own, oil and gas services companies are really taking the brunt of the energy sell off.

Perhaps because i’m not a big risk taker, if I were to add energy names to my portfolio at this point, I would pick from the biggest companies in the world that have a history of dividend increases.  With that, I went digging for global energy ETFs to see their top holdings to determine the biggest energy companies out there.  I then dug a bit further for their dividend information.

Here are the top 10 largest energy oil and gas companies in the world along with their dividend statistics.

Top 10 Largest Energy Dividend Stocks

1. ExxonMobil (XOM) – $378 billion

  • Paying Dividends Since: 1882
  • Years of Consecutive Dividend Increases: 32
  • Annual Dividend/Share: $2.76
  • Payout Ratio: 34%
  • Current Yield (as of January 16, 2015): 3.1%

2. PetroChina (PTR) – $319 billion

  • Paying Dividends Since: 2000
  • Years of Consecutive Dividend Increases: 1
  • Annual Dividend/Share: $4.70
  • Payout Ratio: 54%
  • Current Yield (as of January 16, 2015): 4.1%

3. Chevron (CVX) – $196 billion

  • Paying Dividends Since: 1912
  • Years of Consecutive Dividend Increases: 29
  • Annual Dividend/Share: $4.28
  • Payout Ratio: 39%
  • Current Yield (as of January 16, 2015): 4.1%

4.  Royal Dutch Shell (RDS.A) – $194 billion

  • Paying Dividends Since: 2004
  • Years of Consecutive Dividend Increases: 3
  • Annual Dividend/Share: $3.76
  • Payout Ratio: 69%
  • Current Yield (as of January 16, 2015): 6%

5. China Petroleum (SNP) – $119 billion

  • Paying Dividends Since: 2001
  • Years of Consecutive Dividend Increases: 1
  • Annual Dividend/Share: $3.47
  • Payout Ratio: 50%
  • Current Yield (as of January 16, 2015): 4.3%

6. TOTAL (TOT) – $114 billion

  • Paying Dividends Since: 1992
  • Years of Consecutive Dividend Increases: 3
  • Annual Dividend/Share: $3.16
  • Payout Ratio: 63%
  • Current Yield (as of January 16, 2015): 6.5%

7. British Petroleum (BP) – $105 billion

  • Paying Dividends Since: 1990
  • Years of Consecutive Dividend Increases: 4
  • Annual Dividend/Share: $2.34
  • Payout Ratio: 91%
  • Current Yield (as of January 16, 2015): 6.6%

8. ConocoPhillips (COP) – $77 billion

  • Paying Dividends Since: 1934
  • Years of Consecutive Dividend Increases: 14
  • Annual Dividend/Share: $2.92
  • Payout Ratio: 38%
  • Current Yield (as of January 16, 2015): 4.7%

9. Statoil (STO) – $52 B

  • Paying Dividends Since: 2002
  • Years of Consecutive Dividend Increases: 2
  • Annual Dividend/Share: $1.03
  • Payout Ratio: 84%
  • Current Yield (as of January 16, 2015): 6.1%

10. Suncor (SU) – $42 billion

  • Paying Dividends Since: 1994
  • Years of Consecutive Dividend Increases: 11
  • Annual Dividend/Share: $1.12
  • Payout Ratio: 55%
  • Current Yield (as of January 16, 2015): 3.46%

As you can see from the list above, not all dividend paying companies are created equal.  As dividend growth is a strategy that I use for my personal portfolio (we index the family RESP and spouse’s RRSP), I’m looking for a long history of paying dividends, a history of dividend growth (ie. increasing their dividend annually), and a reasonable payout ratio (dividend paid as a percentage of annual earnings – lower it is, the safer the dividend).

With this criteria in mind, from the list above, I can only see a number of candidates that qualify. They are:

  1. ExxonMobil;
  2. Chevron;
  3. ConocoPhillips; and,
  4. Suncor.

As I already own a number of these positions (that’s my disclaimer), if i were to add, I would watch the stock and buy when I think that the valuation is reasonable (here’s how).

For most investors though, the easiest and likely best solution, is to buy the broad index as they already hold the stocks listed above.  For example, VTI, the broad US market index (or VUN of you prefer to use CAD), ExxonMobil is it’s 2nd largest holding, Chevron is 10th and ConocoPhilips 50th.  In the Canadian index, Suncor is the 5th largest holding and in the MSCI EAFE (international) index, Royal Dutch Shell is the 7th largest holding.

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FrugalTrader About the author: FrugalTrader is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

{ 13 comments… add one }
  • Adam January 19, 2015, 1:08 pm

    Are you sure your BP payout ratio is correct?

    http://www.dividend.com/dividend-stocks/basic-materials/major-integrated-oil-and-gas/bp-bp-plc/

    Good round up. I’m long COP, CVX, P66, BHP, and looking at Shell.

  • FrugalTrader FrugalTrader January 19, 2015, 1:17 pm

    @Adam, I pulled the data from MorningStar. I will take another look.

  • Host January 19, 2015, 5:30 pm

    Thanks for the post.

    I’m really interested in some of the stocks, but since they trade on US exchange which require US dollar, it’s a bummer to convert CAD to US at this point.

  • Joel January 21, 2015, 8:07 pm

    China Petroleum = Sinopec for readers looking to research. Also, if you buy suncor you get the dividend tax credit on Canadian dividends versus the others you don’t. However, if you hold the USA companies in your RRSP then you don’t care. Happy hunting!

  • BeSmartRich January 22, 2015, 9:19 am

    I am looking into adding some Suncor while the price is down. Chevron and Exxon are also too good to miss.

    Cheers,

    BeSmartRich

  • Craig January 23, 2015, 11:07 pm

    How can SU have 11 consecutive years of dividend increases but only start paying dividends since 2009? Similar thing with RDS.A.

    • FrugalTrader FrugalTrader January 24, 2015, 11:24 am

      @Craig, thanks for that. I pulled the RDS data from an article that I found, but I cant’ seem to find it so I adjusted back to Yahoo finance data.

  • SST January 24, 2015, 2:33 pm

    re: “…with oil trading around $50, it is a gut wrenching time to be invested the oil and gas industry…”

    I strategy I engaged a year+ ago was buying a transportation stock to hedge against my oil stock. With fuel being arguably the biggest cost for transport, the drop in oil/rise in stock has mitigated ~60% of the loss from the oil stock.

    My private oil holdings are interesting. The US operation is still fully functional — owning 4 WTI wells and delivery pipeline. We have decided to cut dividends for this quarter to grow our cash position to buffer any further drop and/or take advantage of any acquisition opportunities (we hold no debt). Since I earn in US$ but get paid in C$, the rise in exchange rate has buffered the drop of my return to 26%/yr (down from the initial 55%; but for most of last year it was ~70%). I’ll take it.

    The Canadian company is in similar territory. They too are still fully functional, but over the last year have positioned themselves as a water management entity in addition to O&G. No debt, cash flow not suffering, looking for decimated buying opportunities. The only negative is that their valuation has dropped, naturally, but not at a 1:1 with the drop in oil.

    Fun times. :)

  • SST February 3, 2015, 11:44 pm

    Hope you’ve all been playing along and cashing in on the big bounces! :)

  • SST February 9, 2015, 7:07 pm

    What a difference a couple short weeks make!

    The oil waterfall began seven months ago. Since that time (and as of this writting) the -55% drop in oil prices has been a +55% boon to my oil-heavy public equity portfolio. Here’s why:

    i) my oil stock is -6%; my transportation stock is +35%, and

    ii) I placed two trades during the last month on the oil stock producing 30% and 50% profit.

    Never let a good crisis go to waste!

    (note: portfolio consists of equal book value weighting between the two stocks. Gain is measured against total portfolio book value.)

  • SST March 4, 2015, 12:44 am

    re: “We have decided to cut dividends for this quarter to grow our cash position to buffer any further drop and/or take advantage of any acquisition opportunities (we hold no debt).”

    Looks like we’re not alone in the look-out for deals:
    http://business.financialpost.com/2015/02/24/new-oil-rush-private-equity-starts-to-buy-into-energy-assets/?__lsa=1dc5-e773
    “A slump in oil prices has spurred activity among private equity investors around the world hoping for their own bumper returns [earning US$7 on the dollar] by scooping up assets on the cheap.”

    Mini-update: oil -8%, trans +45%; +59% stock portfolio gain

  • SST March 6, 2015, 12:07 am

    That didn’t take long!

    We just closed a 70 acre acquisition. The current gas production is covering all current property expenses. Immediate focus is on improving gas production as well as bringing the existing oil well to production (neither of which were ever operated to full capacity during the last 50 years). Phase Two will be new drilling. Fun times ahead!

  • SST April 15, 2015, 9:41 pm

    Closed on another 50 O&G acres. There may be some exploration but it was acquired mainly for its water disposal capacity, thus tremendously lowering the cost of disposal as well as generating income by treating water from other producers (both my private oil plays are now in the oil & water biz). I’ll take a quarter year of suspended dividends to secure even more income and profit any time!

    In the public markets, since the 50% drop in oil nine months ago, my two-stock portfolio is up +95%, organically plus trades (that’s ~145% annual return).

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