industrial machine during golden hour

Phil Rogers

March Pick: Shell (LSE:SHEL)

The global oil and gas major released Q4 earnings just a few weeks back, showing how the move higher in oil and gas prices has benefited the company. Q4 adjusted earnings were reported at a whopping $6.4bn, up from $4.1bn from the previous quarter. As well as the higher commodity prices helping to grow topline revenue, tight control on costs and a reduction in net debt also help to put the company in a good space going forward.

We think Q1 results will also be impressive, given the move higher in oil last week above $100 per bbl. Continued momentum this year should also lead to a further increase in the dividend per share payout. This will help to push the dividend yield even higher, a good point to note for income investors.

One point worth noting is that as with all commodity stocks, the share price will continue to be correlated to the price of oil and gas. If you believe either/both are overpriced, then a retracement lower could likely pull Shell shares down with it.

Jesse Williamson

March Pick: Devon Energy Corp (NYSE:DVN)

This month, I am going for a similar stock to Phil. I’ve really liked trading oil companies so far this year. They have provided some great moves and returns already and I think this is just the start.

Devon Energy is included in the energy sector in the S&P500. I prefer DVN to other names such as Exxon Mobil because Devon do not have large holdings in Russia. Exxon are facing pressure to sell off their stake in Rosneft. BP faced the same pressure and sold their 20% holding. The announcement came out this morning and the BP price is down 8%.

Oil is still on the rise and looks set to continue higher with current conditions. Devon doesn’t have the worries that other US energy corporations do, so I think it can do well over the next month.

Robert Henrik

March Pick: LyondellBasell Industries (NYSE:LYB)

Whilst the source of market volatility has moved away from monetary policy concerns to geopolitical tensions, I am still looking for solid stocks with resilience, value, and steady income regardless of the wider market performance. My pick this month is LyondellBasell, one of the largest plastics and chemicals manufacturers in the world. Despite the recent sell off, the LYB stock price increased just over 5% year to date, in contrast to the S&P500’s negative return of ~-9% in the same period.

Dividend Yield & Share Buyback – LYB pays a solid dividend each year due to their strong cashflow. The current dividend yield is nearly ~5%, representing a consistent income source. In addition, if the stock continues to outperform its benchmark, you could earn a significant total return. The company recently repurchased ~5 million shares of their own stock to further reward their shareholders.

Analyst Recommendations – LYB is also well regarded by the institutional crowd, as the latest Bloomberg survey of Equity Research Analysts showed that 97% have issued either “BUY” or “HOLD” ratings on the stock, with only 3% recommending “SELL”. The consensus 12 month target price also implies a potential return of ~16% from the current levels.

AlphaPicks does not own shares in the above stocks. To buy crypto and shares, register here with our preferred partner, EToro.

Leave a Reply