Statoil ASA (STO): This Norwegian Oil and Gas Company Is Cheap

Exxon Mobil Corporation (NYSE:XOM) is the most expensively valued among the three companies. At $91.50 per share, it is worth $406.7 billion on the market. The market values ExxonMobil at 5.8 times EV/EBITDA. Looking forward, ExxonMobil’s proved reserves potential could reach $87 billion BOE, including the current 25 billion BOE in proved reserves, 27 billion BOE in design and development stages and 35 billion BOE in future development. The company expected to have long life resources in its new development in Kearl oil sands project with the production starting in April this year. The Kearl oil sands project’s daily production will be around 110,000 barrels per day and it would be expected to double at the end of 2015.

Income investors should consider those three companies for income portfolios, as all pay decent dividend yields at their current trading price. Total offers the juiciest dividend yield at 4.3% while the Statoil ranks second with a 3.9% dividend yield. Exxon Mobil Corporation (NYSE:XOM) pays dividends with the lowest yield at around 2.8%.

My Foolish take

Among the three companies, I like Statoil the most for two reasons. First, the company offers a decent dividend yield with quite a conservative payout ratio. Even Total offers the highest dividend yield; its payout ratio is as high as 51%, while the dividend yield of Statoil ASA (NYSE:STO) stays only 27%. Second, the market values Statoil the cheapest, at only 1.9 times EV/EBITDA. If Statoil has similar EBITDA multiple to TOTAL S.A. (NYSE:TOT), it should be worth as much as $39 per share, or more than 70% premium to its current trading price.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Statoil ASA (NYSE:STO) and TOTAL S.A. (NYSE:TOT).

The article This Norwegian Oil and Gas Company Is Cheap originally appeared on Fool.com.

Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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