Time to Move out of Hess and Into This E&P Name
I recently shared with the Fool my concern that Hess needs to play offense and not simply rely on the Bakken shale play or the divestiture of non-core assets for financial strength. While Hess did raise its dividend in recent weeks, I believe the company needs to do much more to justify its present valuation. This has me now thinking it could be a good time to take profits in Hess and look at Statoil .
Statoil has been in the rumor mill as a potential acquirer of Hess. However, I really believe that argument has more bark than bite, particularly since Statoil already has a big presence in the Bakken region, a recent bright spot for Hess. Keep in mind Statoil paid over $4.4 billion for Brigham Exploration just a few years back, and that move gave it great exposure to the Williston Basin of the Bakken formation.
Statoil has over $10 billion in cash and could look to reward patient shareholders by boosting its dividend. The company could also look for growth through smaller acquisitions. Also, contrary to reports of the company leaving a Maine wind project, our below video makes a case for Statoil exploring new renewable opportunities; this only enhances my bullish sentiment toward shares of Statoil, which have largely been out of favor with investors in 2013.
This Energy Company Is Printing Money
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!
The article Time to Move out of Hess and Into This E&P Name originally appeared on Fool.com.John Licata has no position in any stocks mentioned. The Motley Fool recommends Statoil (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.