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21 Stock Ideas To Benefit From Weak Oil Prices

The oil price is in free fall and lost half of its value within the recent month. I love it when something changes in such a short period because often it could be a good sign for investors to find new investment targets.

The oil and gas or energy sector is very complicated. There are working many companies in this field and some of them suffering deeply under low oil prices. 

The bad news is that many stocks from the sector did not fall in the same amount as oil prices. One of the main reasons could be that market actors anticipate a mid or long-term oil price forecast of USD 100. That's enough for most of the industry leaders to make money and solid returns.

Not only basic material dividend stocks like Exxon or Chevron are the top picks. 

Indirect, companies with an energy intensive business model like industrial stocks, retailers, auto or restaurant stocks could get a short-term boost.

However, Today I like to share some investment ideas around the energy sector, who are not cheap now but could become an interesting investment.

Indirect oil related investment ideas

Transportation: airlines, railways, trucking companies
Westjet Airlines
Delta Airlines
CN Rail
CSX
FedEx
United Parcel Services

Autos, tire companies, chemicals

Ford Motor
General Motors
Bridgestone
The Dow Chemical Company
E.I. DuPont de Nemours and Company

Grocers and restaurants

Whole Foods Market
The Kroger Company
McDonald's
Yum! Brands

Retailers

Wal-Mart Stores
Target
Gap

Entertainment companies


Walt Disney
Twenty-First Century Fox
Time Warner

Do you agree with me or have you more ideas to share? Please let me know and we will discuss it here. Thank you for reading.

5 detailed top results from each sector...

Dow Chemical (NYSE:DOW) has a market capitalization of $51.01 billion. The company employs 52,186 people, generates revenue of $57,080.00 million and has a net income of $4,816.00 million.

Dow Chemical’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,499.00 million. The EBITDA margin is 13.14 percent (the operating margin is 11.95 percent and the net profit margin 8.44 percent).

Financials: The total debt represents 25.84 percent of Dow Chemical’s assets and the total debt in relation to the equity amounts to 66.77 percent. Due to the financial situation, a return on equity of 22.17 percent was realized by Dow Chemical.

Twelve trailing months earnings per share reached a value of $2.97. Last fiscal year, Dow Chemical paid $1.28 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.57, the P/S ratio is 0.89 and the P/B ratio is finally 2.28. The dividend yield amounts to 3.88 percent and the beta ratio has a value of 1.68.


Long-Term Stock Price Chart Of Dow Chemical (DOW)
Long-Term Dividend Payment History of Dow Chemical (DOW)
Long-Term Dividend Yield History of Dow Chemical (DOW)

McDonald's Corporation (NYSE:MCD) has a market capitalization of $88.86 billion. The company employs 440,000 people, generates revenue of $28,105.70 million and has a net income of $5,585.90 million.

McDonald's Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $10,080.40 million. The EBITDA margin is 35.87 percent (the operating margin is 31.18 percent and the net profit margin 19.87 percent).

Financials: The total debt represents 38.58 percent of McDonald's Corporation’s assets and the total debt in relation to the equity amounts to 88.26 percent. Due to the financial situation, a return on equity of 35.69 percent was realized by McDonald's Corporation.

Twelve trailing months earnings per share reached a value of $5.09. Last fiscal year, McDonald's Corporation paid $3.12 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.95, the P/S ratio is 3.16 and the P/B ratio is finally 5.65. The dividend yield amounts to 3.72 percent and the beta ratio has a value of 0.35.


Long-Term Stock Price Chart Of McDonald's Corporation (MCD)
Long-Term Dividend Payment History of McDonald's Corporation (MCD)
Long-Term Dividend Yield History of McDonald's Corporation (MCD)

Target Corporation (NYSE:TGT) has a market capitalization of $47.27 billion. The company employs 366,000 people, generates revenue of $72,596.00 million and has a net income of $1,971.00 million.

Target Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6,452.00 million. The EBITDA margin is 8.89 percent (the operating margin is 5.21 percent and the net profit margin 2.72 percent).

Financials: The total debt represents 30.93 percent of Target Corporation’s assets and the total debt in relation to the equity amounts to 84.91 percent. Due to the financial situation, a return on equity of 12.02 percent was realized by Target Corporation.

Twelve trailing months earnings per share reached a value of $2.39. Last fiscal year, Target Corporation paid $1.58 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 31.71, the P/S ratio is 0.66 and the P/B ratio is finally 2.95. The dividend yield amounts to 2.75 percent and the beta ratio has a value of 0.65.


Long-Term Stock Price Chart Of Target Corporation (TGT)
Long-Term Dividend Payment History of Target Corporation (TGT)
Long-Term Dividend Yield History of Target Corporation (TGT)

CSX Corporation (NYSE:CSX) has a market capitalization of $33.26 billion. The company employs 31,000 people, generates revenue of $12,669.00 million and has a net income of $1,927.00 million.

CSX Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,764.00 million. The EBITDA margin is 37.60 percent (the operating margin is 28.52 percent and the net profit margin 15.21 percent).

Financials: The total debt represents 29.47 percent of CSX Corporation’s assets and the total debt in relation to the equity amounts to 87.17 percent. Due to the financial situation, a return on equity of 17.78 percent was realized by CSX Corporation.

Twelve trailing months earnings per share reached a value of $1.93. Last fiscal year, CSX Corporation paid $0.63 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.70, the P/S ratio is 2.68 and the P/B ratio is finally 3.04. The dividend yield amounts to 1.88 percent and the beta ratio has a value of 1.32.


Long-Term Stock Price Chart Of CSX Corporation (CSX)
Long-Term Dividend Payment History of CSX Corporation (CSX)
Long-Term Dividend Yield History of CSX Corporation (CSX)

Walt Disney Company (NYSE:DIS) has a market capitalization of $159.18 billion. The company employs 180,000 people, generates revenue of $48,813.00 million and has a net income of $8,004.00 million.

Walt Disney Company’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,863.00 million. The EBITDA margin is 28.40 percent (the operating margin is 23.43 percent and the net profit margin 16.40 percent).

Financials: The total debt represents 17.63 percent of Walt Disney Company’s assets and the total debt in relation to the equity amounts to 33.01 percent. Due to the financial situation, a return on equity of 16.60 percent was realized by Walt Disney Company.

Twelve trailing months earnings per share reached a value of $4.26. Last fiscal year, Walt Disney Company paid $0.86 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.13, the P/S ratio is 3.28 and the P/B ratio is finally 3.57. The dividend yield amounts to 1.22 percent and the beta ratio has a value of 1.14.


Long-Term Stock Price Chart Of Walt Disney Company (DIS)
Long-Term Dividend Payment History of Walt Disney Company (DIS)
Long-Term Dividend Yield History of Walt Disney Company (DIS)

4 comments:

  1. Howard1/21/2015

    DOW: dropped it's dividend in 2008 and still hasn't recovered previous div levels. That violates one of my top criteria. Can't consider buying it.

    MCD: I wish I'd seen your chart before buying McDonalds in November. The chart I looked at only went back to 2005 and showed steady div growth. Your chart shows there was a significant drop in div in 2004. Still, with 10 years of div growth going now, and no decrease during the 2008 recession, I'm okay holding MCD.

    Target: The 2.75% div is a little lower than I like, and I'm wary of the possible negative repercussions of the Canada pull-out. But div growth is very good and I like the diversification it offers. I may add it to my portfolio soon.

    CSX: 1.8% div is too low for me. But for a younger person this stock would be very attractive. Good div growth and good diversification impact.

    Disney: 1.1% div is way too low. DIS raises the div very aggressively, so it should be considered if you're a very longterm investor.

    (Good dividend stocks are easy to find in the tobacco, oil, and utility sectors. I'm willing to accept less attractive stocks if they help diversify my portfolio.)

    ReplyDelete
  2. Anonymous1/21/2015

    Howard,

    MCD paid annual dividends prior to 2008. Their dividend streak of annual dividend increases is intact at 39 years and counting.

    ReplyDelete
  3. Anonymous1/21/2015

    You might want to add FUN to your entertainment listing, as this MLP should benefit from lower oil prices quite well, and pay most of its earnings in dividends.

    ReplyDelete
  4. Target announced they will close most Canadian stores. I'm not sure how it will influence the stock.

    Most of the stocks you present don't currently meet my standards, but I agree these sectors will be interesting to follow with the oil drops.

    ReplyDelete

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