There’s a clear winner for dividend safety, longevity and steady increases in the big oil sector.This company has grown its dividend at an average rate of over 7% every year for the last 20 years and it also has been able to increase that dividend no matter what the price of oil has been.
In this article, I will be searching for the one large oil company that has the safest dividend. With oil prices continuing to fall towards the $30 level, it is important to see how much flexibility companies have when it comes to their ability to continue paying their dividend. I will be using a similar process as I used for an article I wrote last month after Kinder Morgan (NYSE:KMI) cut its dividend to determine which major oil company has the safest dividend.
I used the FinViz stock screener to find my initial list of companies that are profitable and have outperformed the global energy sector ETF (NYSEARCA:IXC).
- Industry: Major Integrated Oil & Gas, Independent Oil & Gas
- Dividend Yield: Positive
- PE: >1 [Profitable]
- Market Cap: > $10 billion
Screen Results & Elimination
After running the screen, I found fourteen companies that met these criteria.
Now that I had my initial list of large oil companies, I looked at the dividend history of each company and eliminated those companies that have had a dividend cut after the top in oil in 2008. In addition, I also excluded EPD because it is an MLP and I already covered it in my article on MLPs. Like with my MLP article I eliminated any remaining stocks that have underperformed the global energy market over the last year, as represented by the iShares Global Energy ETF [IXC].
Filed under: Commodities
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