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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (15015)	12/28/2022 1:04:11 PM
From: robert b furman	3 Recommendations Recommended By chip sixty2nds Winfastorlose Read Replies (2) \| Respond to of 26450

Hi Kirk, Fossil fuel E&P have been bastard children for a decade and longer. It is finally reversing from being a step child, to an affordable and reliable source that is finally surfacing over all of the hype about renewables EV's, and the green transition. I get what you mean about contrarian view. Bottom line the long lead times and huge capital requirements will keep energy stocks in the highly profitable sectors in the lead. XOM has a PE below 10, and huge free cash flow. They bought back 15 billion in shares this year and have bumoed the buyback money to 35 billion over the next two years. Paying a dividend of $3.64 allows their eps to grow and save on the dividends not paid. Louis is late to the game of seeing the low metrics of the oil supers CVX and XOM. Back in the past energys stocks represented twice the weighting in the S&P. They all have a long way to go, to crawl out of the dungeon ESG had put on them. ESG was really just a trendy label utilized to attract the feel good investment dollars - trouble is it not only didn't pay off, it got so carried away with their own kool aid it hurt the ESG's funds with poor earnings. If they had'nt spun the E&P as such bad offenders and focussed on CVX's and XOM's as the cleanest driller who burned the least amounts of methane at their drilling sights and had made big progress in carbon capture and sequestration, they would have been one of the few who were up in 2022. Oil is tight on a global basis, as is natural gas. Prices do not need to go higher for their profitability to continue very nicely. Cold weather, refinery shutdowns planned or otherwise, geopolitical tensions and war with crude caps are all potential escalation events for price to go up. Remember when AMAT was going to go to Ireland for taxation purposes. The tax savings would be so sufficient that if they applied it to buybacks it would ultimately result in buying back all the outstanding. The the dividend would be based on earnings and accelerate. To a smaller degree the CVX and XOM are in a similar, if they can keep buying back shares a continuous small boost to the annual dividend can be assured. Although I'm sitting on a double, I do value a lifetime of increasing dividends over the long run. A blow off top due to one of the above unkowns, and I'll scale out a third and basically ride on the market's money into the future. That's a big IF for a known big dividend payer, but a greater possibility than most Dividend Aristocrats offer. Bob