The outlook for crude oil is looking worse. The world’s economy is in a poor state and there is a glut of refined products which will slowdown refineries from buying crude. However, this Barron’s article argues that Shell is the oil company to buy. The stock got hammered earlier in the year because of its weak financial position, but it has since rallied strongly. The kicker of the investment, though, is that Shell has a dividend yield of 6.6%, which in this low-rate world looks very juicy. Additionally, the article says the shares may move up another 30% within a year to $70. The article says that investors usually look to buy oil and gas companies when the commodity is set to rebound, but in reality, buying them when the market has been so bad that it forces them to use better capital discipline may be a better idea.
OxWFD: Interesting piece with some very good insights into Shell and oil and gas investing generally.