Back to top

Image: Bigstock

Here's Why You Should Still Hold on to TOTAL (TOT) Stock

Read MoreHide Full Article

TOTAL S.A. stands to benefit from its new upstream startups, initiatives to lower operating expenses, strategic acquisitions and agreements, all of which continue to expand its operation on a global scale.

TOTAL's shares have outperformed the Zacks Integrated International Oil & Gas industry’s rally in the past three years. The shares of TOTAL have gained 22.3% compared with its industry’s gain of 15.0%.



TOTAL stands to benefit from its new upstream startups, initiatives to lower operating expenses, strategic acquisitions and agreements, all of which continue to expand its operation on a global scale.

TOTAL presently has one of the best production growth profiles among the oil super majors, characterized by an upstream portfolio with above industry-average exposure to the faster-growing hydrocarbon producing regions of the world.

TOTAL successfully lowered its operating expenses and expenditure, per plans, by more than $3.7 billion in 2017, higher than its $3.5 billion cost-savings target. The company is targeting to lower costs further in 2018. Its cost-saving initiatives will surely help in expanding its margins.

TOTAL is presently working on optimizing the design of capital projects and also concentrating on the proper execution of these projects, as well as lowering capital costs. The company plans to invest in the range of $15-$17 billion in 2018. The company’s strategy to develop integrated gas assets is gelling well with the rising demand of LNG. In addition, TOTAL’s decision to acquire Engie’s LNG portfolio will continue to support the company’s LNG business.

The start-up of new cash-accretive projects, plus contribution from new assets, mainly Maersk Oil, will continue to boost the cash-flow generation capability of the company. The strong cash-flow generation capacity enabled management of the company to increase its shareholders’ value through hiking its annual dividend rate by 10% within the 2018-2020 time frame. It also plans to buy back shares worth $5 billion in the same time frame.
 
Zacks Rank & Stocks to Consider

TOTAL currently carries a Zacks Rank #3 (Hold). Investors can consider some better-ranked stocks from the same industry, which include BP Plc. (BP - Free Report) , Eni SpA (E - Free Report) and Sasol Ltd. (SSL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

BP reported a positive earnings surprise of 16.42% in the last reported quarter. Its 2018 and 2019 estimates have moved up 15.4% and 17.8%, respectively, in the past 60 days.

Eni delivered a positive earnings surprise of 45.5% in the last reported quarter. Its 2018 and 2019 estimates have moved up 11.8% and 50.8%, respectively, over the past 60 days.

Sasol’s 2018 and 2019 estimates have moved up 4.3% and 27.7%, respectively, in the past 60 days.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>

 


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


BP p.l.c. (BP) - free report >>

Eni SpA (E) - free report >>

Sasol Ltd. (SSL) - free report >>

Published in