The nervousness is great. No one knows whether crude oil prices will continue to rise. So it is no wonder that supply stocks have had a roller coaster ride so far this year. We can also see from that Utilities Select Sector ETF (WKN: 989936) from State Street.
The three main economic risks arising from Putin’s war against Ukraine are higher global energy prices, continued shaky supply chains and a sluggish European economy. Many market participants agree today.
I took the market turbulence as an opportunity to take a closer look at European utilities and energy groups. Can their shares offer a starting point in the current environment?
Companies had to meet 4 criteria to be included in my ranking:
- You work in the energy or basic supply sector.
- They are based in Europe.
- Your expected price-to-earnings ratio over the next twelve months is a maximum of 15.
- They increased their dividends by at least 3% on an annual average between 2016 and 2021.
After my Excel macros did their job, I took a closer look at the top 10 in the rankings. And now I want to introduce you to my three favorites from this list.
Enagás is a reliable player
Enagas (WKN: 662211), a Madrid-based utility, is engaged in the development, operation and maintenance of gas infrastructure in Spain, Mexico, Chile, Peru, Albania, Greece, Italy and the United States.
Its market value today (all data as of May 2, 2022) is about $ 5.4 billion. With a price-to-earnings ratio of 13.3, Enagás is one of the currently quite expensive utilities in the market. But the company has a long history of paying a dividend that is fairly stable. This gives me confidence in the dividend potential of the future. Between 2016 and 2021, dividends grew by 4.1% per year. At present, the dividend yield is 8.4 per cent.
Aker BP sits on lucrative resources
This company from Norway might tell you a little. It is engaged in exploration, development and production of oil and gas on the Norwegian continental shelf. Aker BP (WKN: A0LHC1) is currently involved in a total of 36 projects. Pr. At 31 December 2021, proven net reserves were 599 million barrels. The experts at Aker estimate that the reserves should amount to around 802 million barrels.
With today’s price-to-earnings ratio of 10.4, the stock looks cheap. However, the price-to-book ratio is already 4.8. However, the dividend yield of 5.2% comforts some investors. Anchor shareholders Blackrock and Vanguard are pleased with the reliably bubbling dividend. However, one looks in vain for strong insider possessions here.
CropEnergies offers growth potential
CropEnergies (WKN: A0LAUP) from Mannheim is also interesting because it sells bioethanol and other biofuels made from grains. It will be interesting to see how the global food crisis unfolds here. It is definitely a hot potato.
Shareholders are not really rewarded for taking the risk. The dividend yield is currently only 2.8%. Next payday is July 15, 2022, so you have plenty of time to think this investment through.
But in terms of the potential free cash flow, I’m pretty positive. Management around CEO Stephan Meeder expects a significant increase in revenue and operating profit for the first quarter. And in the financial year 2022/23, the turnover must be at least 1.35 billion euros and the operating profit of at least 105 million euros. So there may be some positive surprises when it comes to passive income.
The article Passive Income Despite the Crisis: These 3 Stocks Can Make It Work first appeared on The Motley Fool Germany.
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Henning Lindhoff does not own any of the mentioned ETFs and shares. The Motley Fool does not own any of the listed shares.
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