Four Oil Stocks With Dividends, High Ratings


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The oil patch is an investing area that can be as difficult to sort out as a badly tangled fishing line.

You can endlessly ponder the why behind oil-price trends, or you can cut the knot and start clean.

For investing, that means studying the fundamentals and the price-and-volume action of the stocks.

For the income investor, four oil stocks show Composite Ratings of 90 or better, aren't thin and pay a dividend above 1%. Let's look in order of industry group strength.

U.S. explorers and producers were No. 35 of 197 industry groups in Thursday's IBD.Chesapeake Energy ( CHK ) has a 95 Composite Rating and offers an annualized dividend yield of 1.3%. The company's current strategy is to shift from a natural-gas focus to a more balanced business. Natural gas represents 75% to 80% of revenue.

The Street expects earnings to leap 167% this year.

Field services are No. 88.Oceaneering International ( OII ) carries a 94 Composite Rating and a dividend yield of 1.1%. Revenue is dependent on oil companies' capital spending for deepwater exploration. Market researcher Douglas-Westwood expects deepwater capital spending to double over the next five years.

The Street sees a 27% earnings pop this year.

Pipeline stocks are No. 132.EQT Midstream Partners ( EQM ), which has a 97 Composite Rating, is expected to grow EPS 43% this year. The dividend yield is 3.3%.

Drillers are No. 136.Seadrill ( SDRL ), an offshore deepwater contract driller, features a 90 Composite. The dividend yield is 7.9%.

Payouts vary. Last year's quarterly dividends were 80 cents a share, 97 cents, 84 cents and $1.70. The $1.70 involved an accelerated distribution due to taxes. In June, the quarterly payout was 88 cents and in September (record date Sept. 9) the payout will be 91 cents a share.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing Investing Ideas
Referenced Stocks: CHK , EQM , OII , SDRL

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