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Posted at 05/6/2021 07:39 by waldron florenceorbis4 Jun '21 - 08:40 - 3802 of 3803 0 2 0 TotalEnergies SE : The trend should regain control 06/04/2021 | 07:48am BST Entry price : 39.99€ | Target : 44.7€ | Stop-loss : 37.1€ | Potential : 11.78% The underlying tendency is to the upside for shares in TotalEnergies SE and the timing is opportune to get back into the stock. A comeback of the upward dynamic can be anticipated. Investors have an opportunity to buy the stock and target the € 44.7. TotalEnergies SE : TotalEnergies SE : The trend should regain control Summary The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria. In a short-term perspective, the company has interesting fundamentals. Strengths The equity is one of the most attractive in the market with regard to earnings multiple-based valuation. As regards fundamentals, the enterprise value to sales ratio is at 0.81 for the current period. Therefore, the company is undervalued. This company will be of major interest to investors in search of a high dividend stock. Over the past year, analysts have regularly revised upwards their sales forecast for the company. Upward revisions of sales forecast reflect a renewed optimism among the analysts covering the stock. For the past year, analysts covering the stock have been revising their EPS expectations upwards in a significant manner. For the past twelve months, EPS forecast has been revised upwards. Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock. The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential. Weaknesses The company's earnings releases usually do not meet expectations. |
Posted at 04/6/2021 18:25 by the grumpy old men Is Royal Dutch Shell Stock a Buy?Shell had a solid plan for the future. Or at least it did until things got a little more complicated. What should investors do now? Reuben Gregg Brewer (TMFReubenGBrewer) Jun 4, 2021 at 11:25AM Author Bio Royal Dutch Shell (NYSE:RDS.B) is one of the largest integrated energy companies on Earth. That has put it in the crosshairs of environmentalists looking to take on global warming. The company has started to do something about this issue, but it may not be enough to satisfy detractors. That could make life much more difficult for Shell and its shareholders. The big change Shell made the very difficult decision in 2020 to cut its dividend by a huge 65%. There were two reasons why the giant energy company took this step. First, drilling for oil requires a lot of capital investment, and at the time weak oil prices were making it difficult to fund spending needs. Second, the company announced plans to alter the makeup of its business, shifting toward growth in cleaner energy businesses and reducing its emphasis on oil. A smiling person in front of wind turbines. Image source: Getty Images. That second announcement was notable, as it meant that Shell had heard what investors, governments, and environmentalists were saying about reducing carbon and it was taking action. Some of its peers, notably Chevron and ExxonMobil were, and for the most part still are, dragging their feet on this front. Shell's goal is to get to net zero carbon by 2050, with interim goals of a 20% reduction by 2030 and a 45% reduction by 2035. There are a lot of moving parts to this plan, but it entails reducing oil production, increasing natural gas exposure, and ramping up investment in renewable energy. Shell is not new to the clean energy space either, so it has some expertise to build off of. The goals seem reasonable, but there's one key thing investors have to remember -- the oil business, though shrinking, is helping to fund the transition to a cleaner future. A wrench in the gears Everything seemed lined up for Shell. It had even gotten back to increasing its dividend, now having raised it twice since the cut. That was meant as a sign to investors that the company was financially strong and could be trusted to address clean energy concerns and maintain a growing dividend over time. Based on shareholder proxy voting, investors appeared pleased with the direction the company was heading. Then Shell lost a court case in Europe around its environmental impact. TOT Dividend Per Share (Quarterly) Chart TOT Dividend Per Share (Quarterly) data by YCharts The big takeaway from the case is that Shell was told to increase the pace of its clean energy transition. The court mandated target for carbon emission reduction was 45% by 2030. That pushes forward the 2035 goal by five years, but means more than doubling the carbon reduction originally planned for 2030. This is a massive change. The company responded by outlining the steps it has taken so far and plans to take in the future. And by saying it will appeal the decision. That is the logical step for Shell, but investors need to consider what happens if it loses this fight. Most notably, it will likely have to divest more oil assets to meet the court's mandate. That means less revenue to support the shift toward clean energy. In turn, this will probably lead to increased use of the balance sheet to fund the transition. That is not an ideal solution. What to do about it? At this point, nothing is likely to happen in the near term. However, investors looking for a long-term energy investment might want to step back here and rethink how they go about putting their money to work. This isn't to suggest that Shell is a bad company, only that the court loss raises the risks for this energy company in an unpredictable way. The best alternative right now is likely Total (NYSE:TOT), which is going down a similar clean energy path, has maintained its dividend, and has shareholder support for its transition. Alternatively there is BP, but the company's 2020 dividend cut and high leverage compared to peers are issues that some may, justifiably, find concerning. That said, be prepared, if Shell does end up losing this fight, it is likely that other energy names will find themselves facing similar problems down the line. Should you invest $1,000 in Royal Dutch Shell plc right now? Before you consider Royal Dutch Shell plc, you'll want to hear this. Our award-winning analyst team just revealed what they believe are the 10 best stocks for investors to buy right now... and Royal Dutch Shell plc wasn't one of them. The online investing service they've run for nearly two decades, Motley Fool Stock Advisor, has beaten the stock market by over 4X.* And right now, they think there are 10 stocks that are better buys. See the 10 stocks *Stock Advisor returns as of May 11, 2021 This article represents the opinion of the writer, who may disagree with the “official̶ Reuben Gregg Brewer owns shares of Total SA. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. |
Posted at 30/5/2021 08:58 by florenceorbis KUWAIT TIMESEnergy giant Total rebrands as shareholders back climate plan 29/05/2021 PARIS: French oil and gas major Total on Friday won near-unanimous shareholder support for its climate strategy along with a new name, TotalEnergies, marking its shift – but NGOs dismissed it as “bogus”. Only a tiny minority rebelled against the company’s plans at a shareholders’ meeting, saying they fell short of what was needed to fight global warming. Management’s non-binding resolution, which followed similar moves at energy peers Chevron, ExxonMobil and Shell, secured 91.88 percent backing at the assembly. Total’s pledges include reaching net-zero emissions in its global businesses by 2050, as well as for all its customers in Europe. It also won 99-percent support for a motion to change its name to TotalEnergies as the company wants to show that it is diversifying into renewable energies, which will account for 20 percent of investments this year. Shareholders had recognized “a true and sincere transformation process” and had backed “an audacious and demanding strategy”, said chairman Patrick Pouyanne, who also won approval for a renewed term for himself at the helm of the company. The new name, he said, “marks our collective desire to create a new Total, a multi-energy company and major actor in energy transition,” Pouyanne said as he unveiled the new, multicolor logo. ‘Climate chaos’ NGOs and other investors were disappointed, having announced ahead of the assembly that they hoped 15 percent of shareholders would call out management on their targets seen as too modest. In a joint statement, Reclaim Finance and Greenpeace France cheered shareholders who opposed “the ‘bogus’ climate plan, while furiously condemning the large majority who backed Total’s plan for increased fossil fuel extraction”. “By supporting Total’s greenwashed strategy, shareholders have voted willingly for climate chaos,” said Reclaim Finance founder Lucie Pinson. In the run-up to the gathering, asset management firm Meeschaert AM had urged Total to refrain from any new drilling for oil and gas, echoing an appeal by the International Energy Agency to all energy giants. Pouyanne rejected the call on Friday, saying “radical solutions are not the answer” and reminding his audience that “80 percent of our economy runs on fossil fuels”. Dutch fund ACTIAM meanwhile said that Total’s emissions strategy “falls short as it remains unclear how it will meet its goals given its current pace of fossil fuel production and investments that still significantly outpace those in renewables”. Meeschaert Asset Management, which also voted against the plan, said other shareholders had voiced their opposition by abstaining from the vote, though the number was not immediately known. Eleven investors at last year’s meeting put forward a motion for more ambitious climate targets-prompting Pouyanne to remark on “those who act like activists, not like shareholders”- Shell, meanwhile, was ordered by a Dutch court this week to slash its greenhouse gas emissions by 45 percent by 2030. Last week, Shell shareholders backed a controversial climate strategy to reduce reliance on fossil fuels and become carbon neutral by 2050. Another resolution, put forward by the environmental organization Follow This, which called on Shell to set more ambitious targets, was supported by just over 30 percent. – AFP |
Posted at 30/4/2021 18:07 by waldron Oil Giants Recover as Prices Rebound -- Update04/30/2021 | 03:27pm BST By Christopher M. Matthews Big oil companies returned to profitability during the first quarter as they recovered from the unprecedented destruction of oil and gas demand wrought by the coronavirus pandemic. Exxon Mobil Corp. reported $2.7 billion in net income Friday, its first quarterly profit since the pandemic erupted last spring, while Chevron Corp. reported $1.4 billion in first-quarter profit. The results were boosted by rising oil prices during the first months of 2021, as countries around the world soften coronavirus quarantines. The largest European oil companies, BP PLC, Royal Dutch Shell PLC and Total SE, all reported profits earlier in the week after enduring huge losses last year. "That recovery, which we had anticipated happening at some point in time, is happening sooner than we anticipated," Exxon Chief Executive Darren Woods said in an interview Friday. "As economies are reopening and rebounding quicker, in some places, than expected, we are seeing a demand response." Oil companies endured one of their worst years on record in 2020, as Covid-19 lockdowns choked off demand for oil and gas as road and air traffic fell precipitously. Exxon reported its first annual loss in modern history in 2020 of about $22 billion. But cautious optimism has been mounting that global economic activity could return to pre-pandemic levels later this year as vaccines become more widely available around the world. Chevron Chief Financial Officer Pierre Breber said that demand for gasoline and diesel was nearly back to pre-pandemic levels, and that jet fuel is the last remaining overhang, with strong signs that domestic air travel in the U.S. is picking up. "As we look forward, the next couple of quarters look very good," Mr. Breber said in an interview. "We feel good about our ability to generate cash." Chevron's net income was down about 62% from the same quarter last year, but was a substantial increase from a $665 million loss in the previous quarter. Exxon's $2.7 billion profit compared with a $610 million loss a year ago. BP's profit more than tripled from the previous quarter to nearly $4.7 billion, and Shell reported a profit of almost $5.7 billion. Share prices for the world's largest energy companies have moved in tandem with oil prices that have rebounded markedly in recent months. U.S. oil prices are up nearly 80% over the past six months, while the shares of Exxon, Chevron, BP and Shell are collectively up about 65%. On Thursday, U.S. oil prices neared a six-week high of about $65 a barrel but fell around 2.5% in early trading Friday as traders eyed a build in crude and gasoline stockpiles. The share prices of Exxon, Chevron, BP and Shell were collectively down nearly 2% in early trading Friday. The optimism about oil and gas demand rebounding is being tempered by concerns about rapidly rising Covid-19 case numbers in India and South America, said Bjornar Tonhaugen, an analyst at Rystad Energy. Reduced economic activity in India alone may sap as much as 900,000 barrels of oil a day from global demand, according to Rystad. "For the moment optimism is helping prices, but every trader's eyes are on India," Mr. Tonhaugen said. "The oil bulls are out again but it's doubtful that they are having a confident and calm sleep." In response to growing profits, Chevron, BP and Shell boosted their payouts to investors. On Wednesday, Chevron increased its quarterly dividend by 4%, while Shell also raised its dividend 4%, the second increase since slashing it last year. BP said it would buy back $500 million of shares. Total and Exxon held their dividends flat. The weeklong freeze in Texas that left millions without power in February affected profits for many of the companies, which both produce oil in the state and own plants there to convert the hydrocarbons into fuels and plastics. Chevron's refining and chemical units reported $5 million in profits, down from $1.1 billion a year ago, which Chevron CEO Mike Wirth attributed to the February storm and continuing impact of the pandemic. In total, the storm cut about $300 million from its profit, Chevron said. Exxon said the extreme weather reduced earnings by nearly $600 million. Meanwhile, analysts attributed the strong performance of BP's trading unit to its ability to capitalize on substantial price fluctuations during the storm. Despite the improving conditions, Chevron has pledged to keep capital expenditures austere. Mr. Wirth said capital spending decreased 43% from last year during the quarter, citing its corporate restructuring last year that saw as much as 15% of its workforce laid off. Exxon also has pledged fiscal restraint, saying its plan to cut annual capital spending by about 30% remains unchanged. Some investors are deeply skeptical of the industry notwithstanding climbing commodity prices, according to Paul Sankey, an independent oil and gas analyst. Most of the companies' share prices are still trading below their pre-pandemic levels as investors evaluate the firms' plans to navigate tightening global regulations on carbon emissions. Earlier this month, President Biden pledged to cut U.S. emissions by about 50% from 2005 levels by 2030, targeting greenhouse gases from power plants, buildings and the transportation sector. Mr. Woods said Friday that Exxon is engaging with officials on climate policy and has urged the government to set a price on carbon, which it says would spur investment in carbon-reducing technologies. Mr. Sankey said the industry delivered poor results for years from their core oil business before the pandemic, leaving some to doubt they can reap profits from renewable energy or technologies to reduce carbon emissions, which some of the companies have promised to do. "Their track record is not good enough for them to get into a new theme, because they did so poorly on the old one," Mr. Sankey said. Write to Christopher M. Matthews at christopher.matthews (END) Dow Jones Newswires |
Posted at 09/3/2021 08:46 by ariane Oil supermajors spent almost $50bn to ‘please investors’ in 2020, report findsFeatures & AnalysisOil & GasPetrochemicals By James Murray 08 Mar 2021 The world’s five largest private-sector oil and gas companies – ExxonMobil, Chevron, BP, Total and Shell – collectively spent $49.9bn on shareholder dividends and share buybacks last year Oil pump The oil supermajors generated $20.5bn from their core business operations in free cash flow throughout 2020 (Credit: Pixabay/ArtTower) The oil supermajors combined to spend almost $50bn on payouts to their investors in 2020, according to a report. The analysis by the Institute of Energy Economics and Financial Analysis (IEEFA) shows that the world’s five largest private-sector oil and gas companies – ExxonMobil, Chevron, BP, Total and Shell – collectively spent $49.9bn on shareholder dividends and share buybacks last year. The firms generated $20.5bn from their core business operations in free cash flow throughout 2020 – marking a cumulative gap between free cash flows and shareholder payouts of $29.4bn, which is almost triple the previous year’s deficit. “These results spotlight a harsh reality,” said Trey Cowan, an IEEFA energy analyst and co-author of the report. “Investors can no longer count on the oil and gas supermajors to generate abundant, sustainable cash returns.” Four of the oil supermajors failed to generate enough cash to cover payments to investors The report highlights that during 2020, four of the companies failed to generate enough cash from their primary business – selling oil, gas, refined products, and petrochemicals – to cover their cash payments to shareholders. Texas-based ExxonMobil paid $17.8bn more to shareholders during the year than it generated from its core business operations, while California-headquart Anglo-Dutch multinational Shell was the only supermajor to buck the trend, generating an $8bn cash surplus. But to do so, the company reduced dividends by two-thirds – its first per-share dividend cut since 1945 – and suspended share buybacks and slashed capital expenditures by 28% year-over-year. The report found that the five companies have reported $325bn in free cash flows over the past decade while rewarding shareholders with a whopping $561bn in share buybacks and dividends. It added that the supermajors have funded their “investor-plea It highlights that Standard & Poor’s Global Ratings lowered the ratings of both ExxonMobil and Chevron to AA-, noting that the industry faces a “more difficult operating environment”. “Generous dividends and share buybacks give the globe’s largest private oil and gas companies a veneer of blue-chip financial performance,” said Clark Williams-Derry, an IEEFA financial analyst and co-author of the report. “But closer examination reveals an underlying financial weakness.” |
Posted at 29/1/2021 21:32 by waldron TOT vs. CVX: Which Stock Is the Better Value Option?Contributor Zacks Equity Research Zacks Published Jan 29, 2021 11:40AM EST Investors looking for stocks in the Oil and Gas - Integrated - International sector might want to consider either TOTAL SE (TOT) or Chevron (CVX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look. Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits. TOTAL SE and Chevron are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors. Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels. Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years. TOT currently has a forward P/E ratio of 12.72, while CVX has a forward P/E of 25.10. We also note that TOT has a PEG ratio of 2.97. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CVX currently has a PEG ratio of 5.02. Another notable valuation metric for TOT is its P/B ratio of 1.09. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CVX has a P/B of 1.25. These are just a few of the metrics contributing to TOT's Value grade of B and CVX's Value grade of C. Both TOT and CVX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TOT is the superior value option right now. h |
Posted at 18/11/2020 10:06 by grupo guitarlumber Total lists factors keeping investors at bay in Nigeria’s deep water oil and gas sectorNovember 18, 2020 By Ripples Nigeria There were no key investment decisions taken on deepwater oil and gas exploration in the Nigerian energy industry between 2015 and 2019, much as opportunities for business existed, Total Exploration and Production Nigeria Limited said on Tuesday. Mike Sangster, the managing director of the Nigerian operations of the oil supermajor, disclosed that pending dispute resolution, impending lease expiry and escalating costs accounted for the factors that were keeping investors at bay. “Nigeria has only benefitted from less than five per cent of all investments in oil and gas in Africa between 2015 and 2019 despite having the largest reserves,” the Total chief told the management session of the virtual Nigerian Association of Petroleum Explorationists 2020 conference. Sangster, who was represented by Total’s Deputy Managing Director Victor Bandele, noted that the interventions by authorities in forging an enduring framework for the energy sector was capable of restoring confidence and delivering attractive benefits, which could offer mutually favourable solutions to the country and investors. Read also: NSE: Nestle, Total, Dangote Cement drive gains as Nigerian stocks hit 9-month high “This will further attract more capital investment in an ever more competitive world. A progressive, win-win PIB will no doubt be the catalyst needed for a new wave of hydrocarbon exploration and development investment in Nigeria,” he said. The oil and gas sector of Nigeria, Africa’s biggest oil producer, is proving a hard sell to international investors on account of myriad regulatory bottlenecks and difficulty in doing business, causing it to receive only 5 per cent or $3 billion of all oil and gas funds invested on the continent between 2015 and 2019. The chair of the Society of Petroleum Engineers, Olatunji Akinwunmi, observed that the Niger-Delta Basin, where more than 90 billion barrels of oil had been discovered, remained technically attractive. “Funds for E&P development is globally more scarce in light of the planned gradual transition from fossil fuels dependence to an energy mix that would have increasing contribution from renewables. “There is every need to encourage and support speedy win-win resolutions of the outstanding blocking points in the new PIB as time is not on our side,” he said. AuthorRecent Posts Ripples Nigeria We are an online newspaper, very passionate about Nigerian politics, business and their leaders. We dig deeper, without borders and without fears. www.ripplesnigeria.c |
Posted at 31/10/2020 15:00 by gibbs1 BP vs. Total: Which Oil Company Is Better Positioned for a Green Energy Transition?Two oil giants are making big bets about the future. Which approach is the better option for long-term investors? Reuben Gregg Brewer Reuben Gregg Brewer (TMFReubenGBrewer) Oct 31, 2020 at 10:35AM Author Bio European oil giants BP (NYSE:BP) and Total (NYSE:TOT) have both taken stands on clean energy, with each pledging its support for alternatives to oil. However, there's a notable difference in the business trajectories these integrated energy giants are taking. Here's a look at what the companies are doing, and what it could mean for investors. The quick change artist In August, BP cut its dividend in half. For dividend investors that was terrible news, but it was, to some degree, a sign of the times. The economic closures used to slow the spread of COVID-19 earlier in 2020 led to a massive drop in demand for oil and natural gas. With excess supply piling up in storage, energy prices plunged, and BP's top and bottom lines went along for the ride. However, there was more to this cut than meets the eye. Two hands holding blocks spelling out the words RISK and REWARD. Image source: Getty Images. Around the same time, BP announced it had a new business strategy. Basically, the global energy giant is shifting toward clean energy. That keeps it in line with current feelings toward carbon fuels as the world grapples with fears around climate change. However, it's a big change for an oil company to go green. For starters, BP intends to cut its oil and gas production by 40% by 2030, less than 10 years from now. Meanwhile, it wants to make a 10-fold increase in the number of electric vehicle charging points it owns, and a 20-fold increase in the amount of clean energy it produces. By 2030 40% of the company's capital spending is likely to be dedicated to low-carbon and clean-energy businesses. This is a "jump in with both feet" approach. If something goes wrong along the way, there's not much fallback room. The problem with this is that BP is one of the most heavily leveraged oil majors, with its roughly 1.1-times debt to equity ratio above those of all of its major peers. So it doesn't have much wiggle room. And it's counting on the oil business, which it will be shrinking, to fund its clean energy push. If oil's price recovery is slower than expected or there's lingering industry weakness, it could be hard for BP to generate the cash it needs to cover its debt load and its new business plan. Easy does it Total is looking to make big changes as well, but it's taking a drastically different approach as it looks to shift toward cleaner energy alternatives. It is projecting that its oil production will decline from 55% of sales in 2019 to 35% in 2030. However, natural gas production will increase from 40% to 50%. Natural gas is cleaner than oil and is viewed as a key transition fuel as the world reduces its carbon footprint. That said, Total's overall sales are projected to be higher, so oil and gas sales will actually be up slightly over that time frame -- not lower, as BP is planning. The remaining 15% of sales in 2030 will come from clean energy and electricity, up from 5% in 2019. That 5% figure is noteworthy, since Total has been more consistent in its investment in clean energy and electricity. For example, it has owned a stake in SunPower since 2011. BP, meanwhile, tried to rebrand as "Beyond Petroleum" at one point, signifying a shift toward clean energy. But it ended up dropping the idea and selling much of what it acquired in what proved to be an ill-conceived business plan. Total's capital spending plan is more nuanced as well. Between 2015 and 2019 Total spent about 10% of its capital budget on clean energy. It will up that to 15% between 2021 and 2025, and then 20% between 2025 and 2030. The goal is still to use the legacy oil business to fund a transition to clean energy, but to do it gradually and without materially shrinking what has historically been a very profitable segment. The big change in the oil business is that Total intends to refocus around its lowest-cost oil and gas operations so it can better compete in a world with low energy prices. BP Debt to Equity Ratio Chart BP Debt to Equity Ratio data by YCharts While Total also has a relatively heavy debt load, with debt to equity sitting at 0.77 times, the approach it is taking provides more wiggle room should things not pan out as expected. And it can always speed up its transition should it want or need to. It's a more balanced approach that conservative, long-term investors will likely find appealing. Which company is right? Nobody on Wall Street has a crystal ball, so it's impossible to know if BP's plan to effectively go all in or Total's slower shift will work out better. However, there is a fairly obvious risk/reward trade-off in each approach. If everything works as planned, BP will end up a big winner, and Total will look like it's moving relatively slowly. But it's worth noting that Total will still be moving in the right direction. U.S. peers ExxonMobil and Chevron are sticking with oil for now, which some might see as short-sighted. If the transition doesn't play out as BP is expecting, it could end up flat-footed and behind the pack because it is materially shrinking its oil and gas business. BP isn't exactly taking an all-or-nothing stance, but weak returns in the clean energy space could be a huge drag on the company's overall results. Total, on the other hand, will likely be able to take some setbacks in stride, since it is basically looking to maintain and upgrade its oil and gas business while still building a clean energy operation. For conservative investors, Total's approach looks more appealing. And it's worth noting that Total believes it can continue to support its hefty 10% dividend yield and fund its business transition as long as oil prices stay around $40 a barrel (though they've recently sunk below that level, so there is still dividend risk here). Still, the line in the sand aside, Total should be appealing to dividend investors looking to invest in the out-of-favor energy sector, with a bit of a clean energy hedge thrown in as a bonus. |
Posted at 01/6/2020 20:15 by la forge Investors split 17%-83% over Total climate shareholder resolutionBy Susanna Rust1 June 2020 A shareholder resolution focussed on pushing French oil and gas major on target-setting for emission reductions was rejected by 83% of votes cast, although the 17% ‘for’ vote was welcomed by the co-filers as dispatching a “strong signal”. In a statement, the French-heavy group of 11 investors* behind the shareholder resolution declared themselves “very satisfied” by the level of support expressed at Friday’s meeting, arguing it was all the more significant because French law meant they had had to couch their request in terms of an amendment to the company’s bylaws. The co-filers also noted “negative recommendations from certain international proxy advisory agencies” and said they would be paying attention to the level of abstentions as a potential “complementary signal from shareholders”. The shareholder resolution is said to be the first environmental shareholder resolution to be filed at a French company. Its approval would have required the company’s management report to set out an action plan for the setting of greenhouse gas emission reduction targets, including those generated by customers’ use of Total’s products (Scope 3). Total’s board had opposed the shareholder resolution for reasons including the company having adopted an “ambition̶ The net-zero emissions ambition, which was announced after the shareholder resolution was first unveiled, follows engagement with investors working through Climate Action 100+. Directors’ duties bylaws amend The board also argued against the shareholder resolution by noting its proposal to amend its bylaws to “enshrine consideration of the social and environmental challenges involved in the company’s activities in the duties of the board of directors”. This resolution, which also involves the company taking on a European corporate form, was passed at the AGM with 98% of votes cast. During the meeting itself, which was a webcast closed session, chair and chief executive officer Patrick Pouyanné said the “constructive& He said its new carbon neutrality ambition was “strong and demanding” but that Total would only be able to meet it “with customers, with civil society, with the governments of countries in which we operate because governments will need to implement policies to support the carbon neutrality”. Offshore oil operation One of the investors that voted against the shareholder resolution was PhiTrust, a French shareholder engagement and impact investing company that has been engaging with Total for several years, including on making environmental and social responsibility an integral part of the board of directors’ duties – as approved by the vast majority of shareholders on Friday. “We are delighted that the dialogue we have been engaged in with Total for more than 10 years, as well as with other institutional investors, has led Total’s managers to make major changes to their strategy, taking into account the need to produce ‘clean energy’ as quickly as possible, although we would be very pleased if this could be done more quickly,” a spokeswoman told IPE. ‘Congratulatio In the UK, defined contribution master trust NEST had previously said it would be voting in favour of the shareholder resolution, backing the call that a more ambitious Scope 3 emissions reduction target was needed. “We have seen a positive trend of companies and shareholder resolution co-filers coming much closer together on their climate objectives” Councillor Doug McMurdo, chair of LAPFF The Local Authority Pension Fund Forum (LAPFF) reacted to the outcome of the Total shareholder meeting by saying it “congratulates both Total and shareholders wishing to encourage the company’s climate change response for putting forth resolutions at the company’s AGM”. Councillor Doug McMurdo, chair of LAPFF, said: “We have seen a positive trend this proxy season of companies and shareholder resolution co-filers coming much closer together on their climate objectives. “As it did with Barclays, LAPFF is pleased to support both Total’s steps forward and calls by the resolution co-filers to improve transparency around the company’s move in the right direction on its climate aims.” At NGO ShareAction, campaign manager Jeanne Martin said Total’s new climate commitments were “verging on greenwashing”. She argued that the voting result on the shareholder resolution today constituted “a significant revolt against the company, which attempted to counter this resolution by announcing an ambition that fails to address its ever increasing investments in fossil fuels”. It’s a wrap Total’s general meeting on Friday wrapped up the 2020 proxy voting season at oil majors. In Europe, Royal Dutch Shell and Equinor also faced shareholder climate resolutions focussed on target-setting. Promoted by shareholder campaign group Follow This, they were rejected by shareholders but with more support than in previous years. At Shell the Follow This resolution got 14.4% of the vote at its AGM, more than double the last time it was voted on, and at Equinor it got received 27% of the non-governmental votes, up from 12% in 2019. For Follow This founder Mark van Baal, the votes on the Total shareholder resolution meant that “[f]or the third time this month, responsible investors have sent a clear signal to an oil major.” At US-listed Exxon Mobil, shareholder resolutions on lobbying and splitting the roles of chairperson and CEO were backed by 37.5% and 32.7% of the vote, respectively, with an average of 93.6% of the votes in favour of directors’ re-election. Edward Mason, the now former head of responsible investment for the Church Commissioners, said the results were “clear evidence of shareholders’ desire for change”. In the UK, the asset management industry lobby group maintains a public register of listed companies that have received significant opposition by shareholders to a resolution, with “significant&# This is based on 2016 guidance on remuneration reporting from GC100 group of general counsel and company secretaries working in FTSE 100 companies. *The Total climate shareholder resolution was led by French asset manager Meeschaert with most of the other investors being French asset managers although Actiam from the Netherlands and Benelux asset manager Candriam are also involved, as is UK asset owner Friends Provident Foundation. Combined they hold around 1.36% of Total’s issued share capital. Total said the group of Climate Action 100+ investors with which it engaged represented more than 25% of the company’s shareholders. read the digital edition of IPE’s latest magazine |
Posted at 20/2/2020 20:02 by waldron Ignore BP's Noise, Total Is Giving The Real SignalFeb. 20, 2020 2:24 PM ET| 5 comments | About: TOTAL S.A. (TOT), TTFNF, Includes: BP, RDS.A, RDS.B The Global Investor The Global Investor Long/short equity, portfolio strategy (579 followers) Summary Total continues to provide a strong dividend yield, backed by strong cash flows, from an increasingly diversified energy portfolio. Total is well positioned for the Energy Transition thanks to its leading portfolio in lower carbon energies. Strong 2019 results highlight management's bet on low-carbon is already paying off, putting it ahead of rivals BP and Shell. BP's new CEO recently gave a flashy presentation on its plan to set a course to "net zero" by 2050. Compared to BP's promises however, French supermajor Total (TOT) already has in place a very strongly positioned portfolio to meet the energy transition. Total's portfolio is similar to Shell's, except it has a lower cost base and a higher dividend yield. Total's deal with Adani gas last year gives it a very strong exposure to the growing gas market in India. This deal compliments Total's existing long held renewables and battery investments. As an energy stock, Total's investment case is very strong. 2019 Results At the company's recent 2019 results presentation, aside from a dramatic video of an equipment failure at an oil rig offshore Angola - seemed to be a good metaphor for the challenges facing the industry now and, in the future - management focused on two areas that The Global Investor believes will dominate the debate for the energy sector. These issues are the modernization of the existing business through the deployment of digital techniques, and how a low carbon business can be grown profitably at scale. Regarding digital, Total is still in the early stages meaning there's potential upside to its current $1.5bn productivity ambition. In terms of low carbon, Total is already making £300m of cashflow from its clean businesses and that's very encouraging and shows why Total is in the lead. Total's early entry into clean energy is paying off and delivering better than expected results. Most institutional investors need exposure to the energy sector, for benchmarking reasons, but with environmental, social and governance demands growing every day in the markets, investors are dumping oil & gas exposures as much as they can, as shown by the fact that energy was the worst performing stock market sector in 2019. Total's renewables business provides a strong reason to hold or buy this stock, to maintain sector exposure but avoid the move away from oil. Total's profitability, coupled with its leading position with regard to the energy transition shows the two issues are not mutually exclusive. Think tank Carbon Tracker recently modelled how oil companies might perform under an environment in which greater regulation of the industry is introduced as governments rush to cap emissions to help the climate change situation. While the global investor doesn't see this as a major risk in the new 2-3 years (but the risks do increase as time goes by) Carbon Tracker's analyses which companies might do better under a long-term lower-oil price situation. The report noted: "European oil majors are more reflective of the industry average in terms of risk, ranging from BP and Repsol with around 10 per cent greater sensitivity, to Shell at the industry average, and Total, Eni and Equinor with around 10 per cent lower sensitivity," Along with Royal Dutch Shell (NYSE:RDS.B) and BP (NYSE:BP), Total pays a dividend yield of above 6 per cent (not including share buybacks) and trades on a similar P/E ratio as its Dutch and British peers. Total though showed more resilience through the 2019 price environment, with cash flow from operations flat on the year before at $24.7bn, although adjusted net income was down 13 per cent year on year. This result was comparatively better than both Shell and BP. Why? Part of this performance is due to the fact that Total is comparatively advanced on the energy transition front, if we include gas, a less carbon-intensive option compared to coal. Its lower-carbon division, integrated gas, renewables and power - iGRP- produced cash flow of $3.7bn in 2019, up from $2.1bn the year before. The driver here was largely the added gas capacity, however Total also doubled the size of its renewables portfolio in 2019. The renewables portfolio alone contributed cash flow of some $200m. During the fourth quarter results presentation Total chief executive Patrick Pouyanné said the supermajor's goal was to grow this figure to $1bn by 2025. Total is on the way to achieving this, it was picked to build an 800 megawatt solar plant in Qatar. The group is also working on battery technologies. As well as expanding its gas offering, Total is planning to keep passing shareholders more cash. The 2019 dividend increased by 5 per cent to €2.68 per share. 2020 will see around $2bn of share buybacks if oil can achieve an average price of $60/bbl. At the time of writing, Brent crude oil is trading at $56/bbl, as coronavirus worries have hit oil spot prices hard since early January. Scope 1 and 2 emissions Investors in resource stocks will have heard the term Scope 1, 2 and 3 emissions a lot recently. Targets on Scope 1 and 2 emissions, which are direct emissions from operations and those from power suppliers, respectively, are widespread among most large resource companies now, but scope 3, the emissions linked to companies' own products, burned by customers, is where the competition is at now. Total is aiming to get its scope 1 and 2 emissions to under 40m tons by 2025, from 41.5m tons in 2019. Given its renewable energy portfolio, Total's weighted average scope 3 emissions are reduced as renewables produce zero emissions at the scope 3 level. As Total accelerates its low carbon businesses and cleans up its fossil fuel production with increased digital oversight of its operations, The Global Investor believes Total's investment proposition is the strongest of all energy supermajors. Risks Clearly, Total is still predominately an oil and gas company. Global gas prices have been trending down and seem to be well supplied in the medium term. The trend for governments and consumers in the West to make the shift away from oil seems to be picking up pace. However, The Global Investor believes that as oil project funding gets harder and capital expenditure is moved away from the oil patch, this only sets us up a bullish oil price scenario further down the line, especially as oil demand growth in Emerging Markets appears to be in no danger of slowing down any time soon. For investors who can play the long/short game, it's worth considering shorting another supermajor against the long position in Total. I believe Total will be the best supermajor performer in the medium term, but the risk of oil & gas divestiture trend continuing for a while is real. This divestiture trend will probably end when the oil price bull market returns as I expect, because as they say "the cure for low prices is low prices". |
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