Income · Stocks to Consider and Updates

Total Reports First Period Results; Hikes Dividend

French energy giant Total SA (NYSE: TOT – $56.04) reported adjusted operating income of $3.4 billion in the first quarter, an 1% increase compared to the first period of 2018. The Exploration and Production business operating income was $1.72 billion, five percent lower than a year-ago. The Integrated Gas and Renewables segment showed a 23% increase in operating income and Refining & Chemicals was higher by 5%. The downstream businesses – Marketing and Services – was lower by 7% on an adjusted operating income basis. Net income for the entire group was $3.1 billion, equal to $.90 per share compared to $0.89 last year, but six cents below Street views. The Board of Directors declared the distribution of the first 2019 interim dividend at an amount of €0.66/share, an increase of 3.1% from the 2018 and yield investors about 5.2%.

       The company ought to continue to return an ample amount of capital to its shareholders. Notably, the board has laid out a return policy for 2019 that suggests a modest hike in the dividend payout, as well as continued stock repurchase activity to the tune of about $1.5 billion. Hence, risk adjusted total return potential for Total out to mid-decade is attractive at the recent quotation and its current investment characteristics make it a strong candidate for most income portfolios.

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