This is Not the End of Oil
Oil, energy… it’s all down. That’s a fact.
Recession talk has pushed the West Texas Intermediate (WTI) crude oil prices below $105 per barrel this past week – the lowest price we’ve seen since early May. Similarly, energy stocks have taken a beating because of recession fears. Over the last month, United States Oil Fund (USO), Exxon Mobil Corp. (XOM), and Chevron Corp. (CVX) are all down 2.03%, 7.93%, and 16.05%, respectively. That’s just to a name few.
But, I’m still recommending that you buy oil stocks.
06/28/2022 Take It to the Bank Tuesday Transcript
Hey everybody! Shah Gilani coming to you with your Take It to the Bank Tuesday, where I recommend what you should do with $100 today – as in right now.
What’s hot? A lot of things are hot and more things are not. But what was hot and is not is oil. Yeah. Oil had a heck of a run, energy stocks had a heck of a run, and now they’re all coming down. It’s like, “Ooh, the collapse of oil!”
Oil, isn’t going anywhere. Yes. It’s come down off its highs. It’s gonna settle down somewhere around here. Then it’s gonna bounce back up, people. The reason that oil’s coming down, the reason that energy stocks have come down from their lofty peaks, is because of the recession talk. But we will get past this recession and they’re not making a heck of a lot more… what I’m gonna call capital expenditures (CapEx) in the oil patch. Why? Because oil companies are being vilified.
Now they’re being cheered on as if they’re supposed to – all of a sudden – plow a ton of money into fossil fuels. So, bottom line, they’re not gonna plow a whole lot of money back into CapEx to start to drill more, produce more, and search for more oil. But it’s not gonna happen at the rate that we would like to see it happen, or that we need to see it happen. That means oil prices are going back up, people! Plain and simple.
That means, with the dip here, it’s an opportunity.
So, my favorite (especially if we are heading into a recession and you want collect income from your energy play) is TotalEnergies SE (TTE).
TotalEnergies is a French giant, and guess what? Total dividend yield is 5.3%, people. So, it pays you 5.3% a year to hold onto the stock.
The stocks trading at $52 in change – down from $61, recently. I think it’s heading back up to $61 and you’re gonna get paid to own TTE 5.3% a year. That’s pretty nice. It doesn’t mean that they’re not going to increase that dividend. It doesn’t mean there’s not going to be special dividend payments, I think there will be because the company’s making a ton of money. It’s gonna continue to make money as long as the price of oil stays up here (and it’s going higher in my opinion).
So, for your a hundred dollars today, buy TTE, total energies.
Why? Because you get paid 5.3% a year to sit on the stock and watch it appreciate along with the price of oil. That’s what you do. So, for your a hundred bucks, buy TTE and take it to the bank.
Catch you next week.