Is This European Oil Company Superior to Its American Competitors? – TOTAL S.A. (ADR) (TOT): Chevron Corporation (CVX), Exxon Mobil Corporation (XOM)

The Bottom Line

TOTAL S.A. (ADR) (NYSE:TOT) has placed an objective to improve its day-to-day production from 2.4 to 3.0 million barrels/day within the following 5 years. Since the corporation has presently initiated the creation of all of the initiatives that will generate growth until 2015, it is extremely probable that the corporation is going to complete its target. In accordance with the evaluation of Total, every 10% increase in the upstream production, is going to increase its revenue by $1.5 billion, meaning that the mentioned achievement will probably increase its present revenue by around 25%. For Total, this is a substantial progress although yet not enough to outperform its two competitors.

TOTAL S.A. (ADR) (NYSE:TOT) continuously performs fairly well and increases its solid financial position. The ambitious exploration approach together with the purchase of new drilling licenses helps the business to improve its reserve base. Nevertheless, the business has been affected by the prolonged economic weakness in the European Union and also the predominant insecurity in the African continent. It is crucial to point out to investors that a considerable percentage of the company’s production originates from these areas.

Finally, Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) have displayed a far greater performance than Total regarding the increase of revenue and dividends in earlier times. As a result, I would suggest these two organizations instead of Total. Only when an investor is especially considering the dividend yield of the upcoming couple of years, Total could be the most suitable option for this investor, although the capital gain from Chevron and Exxon will probably surpass the entire return of Total.

Because the stock of TOTAL S.A. (ADR) (NYSE:TOT) moved to nowhere over the previous 4 years (trading somewhere between $42 and $65), I would advise to investors to wait for a short-term correction towards the support at $46. Only after that, Total is able to improve the substantial dividend yield with a considerable potential capital increase.

The article Is This European Oil Company Superior to Its American Competitors? originally appeared on Fool.com and is written by Marcus Vilkas.

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