Repsol, S.A. (REPYY - Free Report) recently announced its intention to increase its dividend by 8% annually. This will result in pushing the dividend per share to €0.95 ($1.12) in 2019 and €1 ($1.18) in 2020, from the current level of €0.90. The company also intends to carry out share repurchase programs to avoid dilution. This came as part of its updated targets for its 2016-2020 strategic plans.
The company also has plans to invest around €15 billion ($17.6 billion) in its operations, in the 2018-2020 time frame. The company sets its new targets based on the expectation that Brent benchmark will be above $50 per barrel during this period.
Upstream activities: The company intends to increase its exploration and production activities through 2020, while achieving a 8% production growth rate. Repsol will employ €8 billion in upstream businesses, which is expected to help the company reach its production goal of 750 thousand barrels of oil equivalent per day by 2020.
Downstream activities: Repsol will invest €4.2 billion in its downstream projects, which also includes international expansion. The company’s service station business in the Mexican market and its huge presence in Peru are incorporated in this plan.
Energy transition: Repsol intends to invest €2.5 billion in several energy projects, which will focus on low-emission. It will give the company an opportunity to develop projects with long-term activities. It also follows the company’s plan announced earlier on focusing more on renewable resources. Repsol has set a new goal of reaching 2.5 million retail gas and electricity clients in Spain by 2025. The company also intends to reach a low-carbon generation capacity of around 4,500 megawatt.
Madrid-based integrated energy company, Repsol, has gained 18.9% in the past year compared with 13% growth of its industry.
Zacks Rank and Stocks to Consider
Currently, Repsol carries a Zacks Rank #3 (Hold).
Investors interested in the Energy sector can opt for some better-ranked stocks in the same space like Anadarko Petroleum Corporation (APC - Free Report) , Delek US Holdings, Inc. (DK - Free Report) and HollyFrontier Corporation (HFC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Woodlands, TX-based Anadarko is an exploration and production company. For 2018, its bottom line is likely to be up 239.3%. In the last reported quarter, the company delivered a positive earnings surprise of 20.1%.
Brentwood, TN-based Delek is an energy company. The company’s top line for 2018 is anticipated to improve 39.2% year over year, while its bottom line is expected to increase 230.2%.
Dallas, TX-based HollyFrontier is an independent refining company. For 2018, its bottom line is likely to be up 127.6%. In the last four reported quarters, the company delivered an average positive earnings surprise of 41.3%.
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