FYI: Oil exploration-and-production companies typically haven’t prioritized dividends and share buybacks. There are signs that’s shifting.
Eager to capitalize on the U.S. shale boom, E&P companies piled on debt as expenses outstripped their cash flow. Capital returns to shareholders often took a back seat to pouring money into production growth, helped by mergers and acquisitions.
“It was the rare company that self-funded everything,” says John Dowd, manager of the Fidelity Select Energy fund (ticker: FSENX) since 2006.
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Now, some of these firms are maturing and changing their ways when it comes to capital allocation, potentially signaling better days ahead for income investors.
Regards,
Ted
https://www.barrons.com/articles/dividends-are-now-part-of-the-oil-stock-playbook-51568282401?mod=past_editionsM* Snapshot FSENX:
https://www.morningstar.com/funds/xnas/fsenx/quote
