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Strategies & Market Trends : Value Investing
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To: armi who wrote (43700)8/4/2011 12:22:23 AM
From: Spekulatius   of 78670
 
XOM is a somewhat better managed company but TOT is way cheaper. A few things to consider:

1) TOT US presence is negligable compared to XOM US market. XOM has a large domestic upstream sector that benefits from lower US taxes than almost anywhere else in the world. This means that XOM will benefit somewhat more from rising crude prices than TOT (most taxes are progressive due to royalty components. This works the other way too, at lower crude prices TOT taxes and royalties will go down much more so than XOM companywide. This means less earning volatility for majors like TOT, E, RDS, compared to those companies with a large US business like XOM, COP , CVX or even more so MRO, HES etc.

2) Don't compare US$ based YoY results with Euro based results (TOT) YoY. The Euro has risen more than 10% YOY relative to the $. The Clownbuck makes US companies with large international operations look good based on US$, purchasing power would be another matter.

3) large dividend (5% yield)
4) Very low asset valuation: Message 26778484
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