3 Reasons Every Family Office Should Own Oil and Natural Gas Stocks
Family offices are entities established to invest in assets for wealthy families. The investing goals for family offices are much the same as those for individual: protect the wealth, increase the asset base, and provide growing, steady income, among others. For that reason, there are three reasons that family offices should invest in oil and natural gas stocks.
There is a very bullish future for the oil and natural gas industry.
Reports from the U.S. Energy Information Agency and the International Energy Agency have energy demand increasing greatly in the decades ahead. By far, the bulk of the need will be met by fossil fuels. The International Energy Agency estimates that oil, natural gas, and other fossil fuels will be providing 75 percent of the world's energy needs in 2035.
In addition to demand increasing in the decades ahead, there is a wide range of stocks to choose from to meet every investing objective for a family office.
The sector contains prominent blue chips such as Exxon Mobil (NYSE: XOM), ConocoPhillips (NYSE: COP) and Suncor Energy (NYSE: SU). It also had promising small caps such as Octagon 88 (OTC: OCTX) and Apco Oil and Gas International (OTC: APAGF).
Exxon Mobil is the world's largest oil firm. Both Suncor Energy and ConocoPhillips are major holdings of uber-investor Warren Buffett. Octagon 88 is up in recent market action to due very promising reports about its holdings and the commencement of drilling operations soon. Apco Oil and Gas has very appealing margins. From these and other stocks, the growth and value investing goals of a family office can be easily satisfied.
To provide income and enhance the total return for a family office, the oil and gas sector is known for having paid healthy dividends.
The dividend yield for ConocoPhillips is 3.76 percent. For Exxon Mobil it is 2.72 percent. Suncor Energy provides its shareholders with an income stream at about a 2.1 percent rate. All have a history of dividend growth, which rewards long term investors, such as family offices.
From a promising future to a wide range to increasing dividend income, stocks in the oil and gas sector can meet every investing need and goal for a family office. That same holds true for individual investors. Whenever there is a decline in the shares of companies in the oil and natural gas sector, that should be looked upon as an opportunity to buy for the long term at a lower price with a higher yield.
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