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Meet the Ultra-High-Yield Value Stock That’s Going to End Up Returning $14 Billion to Shareholders in 2024

Updated: 02-11-2024, 01.39 AM

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It’s been a rough year for Norwegian energy giant Equinor (NYSE: EQNR), with the stock price falling 19.5% year to date. Equinor has been the worst-performing energy major in 2024, underperforming peers ExxonMobil, Chevron, TotalEnergies, Shell, BP, Eni, and the broader energy sector.

Despite the poor performance of the stock price, Equinor continues to generate solid earnings and return a record amount of capital back to shareholders. Here’s why Equinor stands out as one of the best oil and gas dividend stocks to buy now.

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Image source: Getty Images.

Equinor is a majority-state-owned international energy company. Since 75% of the company is owned by the Norwegian state and Norwegian private owners, Equinor is heavily influenced by Norway’s energy policy.

Norway has abundant offshore reserves along the Norwegian Continental Shelf (NCS). Equinor has been drilling the NCS for decades. Although it has diversified its upstream portfolio, Norwegian exploration and production efforts still account for 85% of its total oil and gas operating income.

There’s no real need for Equinor to diversify its oil and gas portfolio too much beyond Norway because of its experience operating in the region and because technological advancements have unlocked new opportunities along the NCS. For example, Johan Sverdrup has become the third-largest oil field along the NCS and now represents a whopping third of Norway’s oil production.

On its third-quarter earnings call, Equinor said that Johan Sverdrup has produced over 1 billion barrels of oil in five years, over $80 billion in revenue, and set a new record of 756,000 barrels produced on Sept. 21. For context, ExxonMobil averaged 630,000 barrels per day from Guyana in second-quarter 2024. ExxonMobil has been investing heavily in Guyana, which is now its largest offshore production region.

Despite growing Johan Sverdrup, Equinor’s NCS production was up just 2% in the quarter compared to the same quarter last year. As mentioned, the company is influenced by Norway’s energy policy, which has aggressive climate targets. As such, Equinor has been investing heavily in renewable energy and making measured investments in oil and gas. It has been far less aggressive than companies like ExxonMobil and Chevron, which are accelerating oil and gas capital expenditures and making blockbuster acquisitions.

Equinor has been investing in a variety of renewable energy projects. It was an early adopter of offshore wind and plans to have 12 gigawatts (GW) to 16 GW of installed renewable capacity by 2030. Renewable power generation reached 677 GWh in third-quarter 2024 compared to just 373 GWh in third-quarter 2023.

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