Which Oil Stock Is A Better Buy? Exxon Mobil (XOM) or Enbridge (ENB)

Due to a structural supply deficit and the impact of the Russia-Ukraine war, oil prices have risen of late. Exxon Mobil (XOM) and Enbridge (ENB) are two leading names.

Although both companies are in the oil and natural gas sector, their business models are different.

On the one hand, Exxon Mobil (XOM) concentrates on searching, producing, processing, and selling oil, natural gas, and derived products, including gasoline and chemicals. They have a straightforward correlation to supply/demand for the products and price changes in the mentioned commodities.

On the other hand, Enbridge (ENB) facilitates the transportation and storage of oil, natural gas, and related products. They have a more stable infrastructure with fee-based contracts. They get paid a fixed amount for transporting a specific volume of these commodities through their pipelines. As a result, their exposure to the shifts in the price for these commodities is relatively low compared to Exxon.

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Both companies have been great for income investors. Exxon offers a 4.4% dividend. Meanwhile, Enbridge offers a hefty 6% dividend. In addition, both companies are Dividend Aristocrats as Enbridge has raised dividends for 27 years in a row, while Exxon has done the same for 39 years.

One concern with Enbridge is their payout ratio running at 119%. They pay a $2.69 dividend but only have an EPS of $2.25. It could be trouble in the future if they don’t increase their earnings. However, their annualized dividend growth is currently 5.48% since 2000. Their 5-year growth rate is 10%.

Meanwhile, Exxon’s payout ratio is only 65% leaving plenty of room for future increases. Their current dividend payment is $3.52 with an EPS of $5.38. Their annualized dividend growth sits at 3.20%, with 5-year dividend growth of 3%. Also, their exposure to higher oil prices could help them ramp up their dividend growth in the coming years.

Enbridge infrastructure is more of a defensive business, helping them to remain profitable during hard times like during the Covid-19 pandemic. During this time, Exxon saw its earnings drop to negative numbers in Q2 and Q3 in 2020.

Enbridge proved their excellent resilience during these challenging times, seeing their cash flow per share rise while Exxon struggled during the same period.

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Fast forward to the current environment, and Exxon is forecasted to grow their earnings per share by 50%, while Enbridge’s forecast is 7% this year.

Although renewable energy is experiencing growth worldwide, the consumption of oil and natural gas will likely keep rising in the coming years. The IEA forecast natural gas demand to grow by 30% by 2040. That gives investors almost two decades of growth still in the tank. Everything else after that will largely depend on where the world is moving to as far as consumption goes.

Global oil demand will continue to grow through 2030, at least by the IEA forecasts. The trend gives the energy industry a solid outlook for the next couple of decades.

Which stock is a better buy?

Both stocks could easily continue to outperform the broad market as long as the pricing environment for energy remains as is.

If you want a significant oil price exposure and are willing to remain calm when the supply/demand for oil is down, meaning that prices could decline, leading to lower profitability for Exxon, then Exxon (XOM) is your pick.

If you want less exposure to oil prices but instead a more stable and reliable cash flow offering a solid dividend growth, then Enbridge (ENB) is your pick.

Ultimately, suppose you want exposure to both. Then, you can either buy both or something like the energy ETF (XLE), a basket of energy companies with an annualized dividend growth of 10.31% and a current dividend yield of 4%.

Now, begin your Road to Wealth!

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DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

GAMESTOP (GME) CONTINUES TO COLLAPSE; IN WHICH DIRECTION IS THE COMPANY GOING?

Key points:

– Earnings fall short

– Company “transforms” as investors pray for a better future

– Negative sentiment after having doubts in creating a market for NFT’s

Since it became a social media meme, GameStop (NYSE: GME) company has been a highly volatile stock. However, without any solid foundation in terms of financial fundamentals, the shares survive because of investors who continue to create an advertising bubble on social media.

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Since June 2021, the shares have been steadily down. The company reported a net loss of $141M, which translates to a loss of ($1.86) per share—falling well short of Wall Street projections of just ($.85) per share.

The company has a questionable direction and continues to lose value while there are no signs of improvement soon. The company says it is transforming itself into a technology company obsessed with its consumers. Still, nothing happens on the surface.

When they publicly announced their profit/loss, they talked about the metaverse and NFTs as possible solutions.

Wedbush analysts argued the opposite. They were saying that it would have limited success. They also cut their price projection with a target between $45 and $30.

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Today after being worth over $300 in the summer of 2021, they are worth just $90. Not only that, but with this cut in projection, investors are eyeing more losses shortly.

The company has not adapted to the new digital world and may disappear just like BlockBuster did a few decades ago.

They may survive, but their options are limited, and their chances run out.

When the rest of the investors wake up to reality, there’s a very high probability that we’ll see GameStop back trading in the single digits as it did between 2019 and 2020.

Be very careful where you invest your money and seek information before investing. Please do not get carried away by social media and their advertising.

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

I officially doubled the output of my co-workers, and this is how I did it:

Humans are all creatures of habit. Some habits help you improve while others drag you down. So if you are not as successful as you wish, you need to tweak a few habits to go from negative to positive.

Every morning, you wake up, then what do you do? Exactly! You have a routine. That is what habits are, something that you repeatedly do. No longer thinking about it, like Nike, you “Just do it”!

With this in mind, think of the person you wish to become, then take action in that direction.

For example, let’s say that you want to become more fit for the summer, then create a simple habit that will grow into something big. Start with walking for 10 minutes each day—no need to get on a treadmill for hours. Habits should start simple and not feel like a hassle because they will be your self-improvement’s compounded interest. I assure you that those 10 minutes will seem like nothing in a few weeks, and you will begin adding time. Meanwhile, your body will start re-shaping itself into the person you wish to become.

Starbucks (SBUX) pays dividends that can cover your daily coffee.

Create your routine. Each day will look similar, so ensure to be rehearsing good habits repeatedly until you become automatic like a system. Remember that you do not rise to the level of your goals and expectations. Instead, you will fall to the level of your systems. If you have a broken system, you should only expect to fail.

Schools and Politicians (aka the government) are great examples. It doesn’t matter which teacher or politician takes charge; they keep failing over and over again. So, are they all that bad? Not really. There are plenty of great teachers and politicians as well. But, sadly, the system used to run schools, and the government is broke. So, everyone within that system will fail regardless of how great they are individual. The same goes for you. You may be a great person, but it becomes harder to succeed if you have bad habits.

Forget about goals. Goals are great for giving you direction. Rather, focus on your systems instead. Systems are best for making progress.

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How did I double the output of my co-workers?

I created a system. I prioritized the boss’s projects on a calendar for the beginning of the month. Then, all the small projects were spread daily throughout the week.

Every morning, I did the projects that I knew wouldn’t take me much time. I knocked out 3-4 little projects every morning. In the afternoon, I started taking down the big projects. Some took me all afternoon. Others were partially complete.

If I cannot finish the big project the same day, I will write it down for the next business day.

On the next business day, you have 2 options:

1. Do the little projects in the morning and the big projects in the afternoon.

2. Finish the big project from the previous day in the morning and use the afternoon for everything else.

I like to keep the routine or system running the same. That means I keep doing the small and quick projects in the mornings and leave the big projects for the afternoon. Finishing those little projects gives me a sense of pride and confidence that I carry into the afternoon to knock out the big projects.

I remove all distractions from my work area. Once I’m focused and in the zone, I can go for hours without stopping. Unfortunately, my co-workers spend too much time looking at Facebook, Twitter, and Instagram. You may not think about it, but try it for yourself. Remove your phone from your work area and see how much you can get done without distractions.

The only exception to changing my routine is that a big project is due soon, and we need to ensure it’s complete by a specific upcoming date.

Pepsi (PEP) is the owner of my favorite drink ‘MountainDew’.

A similar thing happens when it comes to investing. I have invested and subsequently have a more significant net worth than all my co-workers. Do you want to know why and how?

Simple, I have a system to invest my money every month automatically, and I have consistency.

For more lessons, tips, and tricks, read the book by James Clear titled “Atomic Habits.” You will find easy and proven ways to build good habits. For creating businesses that don’t need you to operate, read “The 4-Hour Workweek” by Timothy Ferriss.

Summary:

That is how you can do the same. Look at your habits. Transform yourself by removing bad habits by replacing them with good ones. Those good habits will compound into even better habits, and you will become the person you always dreamed you could be. Create a daily system that will incorporate the routine you will use from the moment you wake up, have breakfast, go to work, lunch, work the second part of the day, exercise or practice a hobby, return home, enjoy some family time, and bed head. You can add or subtract things as needed. But know that systems are everything. You have to be the designer of your life. Take charge!

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

With Fundrise you can become a digital landlord anywhere in the United States, without the hassle.

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.

MARKET REVIEW WEEK 21-25 FEB & DIVIDEND INCREASES

We have seen images and videos of everything occurring in Ukraine over the last week. The stock market was anticipating the attacks and has declined quite a bit from its top the first week of 2022. It has steadily declined ever since, although we had a bounce the last couple of sessions.

Looking at the S&P500 (SPY) chart, prices have bounced before from the $420-430 area. This time, the difference is that we are currently under all the simple moving averages to include the 200 SMA. It’s as bearish as you can get in the stock market.

S&P 500 (SPY) as of 25 Feb 2022.

To turn bullish again, we must trade above the averages, which means prices need to climb over the $450 area.

Pullbacks and market sell-offs are great buying opportunities for long-term investors since you can buy your favorite stocks at discounted prices. It’s like going to the clearance section at your favorite store.

Pepsi (PEP) is a proven company through the ups & downs of the stock market.

History shows that stock markets tend to drop during wartime. However, once it’s resolved, the stock market tends to begin to climb up once again.

With that said, traders have their hands full, trying to figure out which side of the trade they should position. The swings right now are significant, and traders may find themselves in losing positions relatively quickly.

On a positive note, several companies announced dividend increases over the last couple of weeks, while no company has announced dividend cuts.

The picture below shows which companies announced their dividend hikes:

Dividend increases for the last 2 weeks of February 2022 by Joey Ortiz.
Dividend increases over the last 2 weeks of February 2022 by Joey Ortiz.

Overall, we are trending lower in the stock market. Ensure to have a plan and execute your plan as close to perfection as possible. Follow your rules and stay true to yourself. Your plan should account for up and down markets as well.

We will be back next week with more updates. Glad to help!

Now, begin your Road to Wealth!

Leave your comment below. If you liked it, pay it forward. Please share it on social media and help others become successful as well. Your success will be the result of two things: Knowledge and Action.

Follow me on TWITTER, PINTEREST, INSTAGRAM, LINKEDIN, FACEBOOK for more posts and updates. You can also reach me here with any questions.

From the comfort of your home, invest anywhere in the united states with Fundrise.

DISCLAIMER: Please read our disclosure policy here. This post contains affiliate links, and I earn from qualifying purchases at no cost to you. There is a very high degree of risk involved in trading. Past results are not indicative of future returns. Road-to-wealth.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles, and other features are for educational purposes only and should not be construed as investment advice. Information for any trading observations is obtained from sources believed to be reliable. Still, we do not warrant its completeness or accuracy or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk, and it is your sole responsibility to evaluate the information’s accuracy, completeness, and usefulness. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein.