Oswald Clint, Analyst with Sanford C. Bernstein & Co., says Total SA (ADR) (TOT) is one of his favorite names in the oil & gas sector. He likes the French integrated oil company for a number of reasons and says it peaked in terms of its investment in 2013.
“So the capital requirements of this business are declining, and ultimately we believe project execution is good, project quality is high, and we believe cash flow strength will also be very strong over the next couple of years, and I think that’s what drives our confidence in this particular name,” Clint says.
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Total has historically had better returns relative to other integrated oil & gas companies, Clint says. And, the company also has increasing exposure and weighting to long-life assets.
“So again, LNG, oil sands, these are assets that we think are good for the scale of these companies,” Clint says. “All of them can tackle these types of projects given their engineering prowess and their ability to develop challenging projects. They can get better returns from these projects versus smaller E&Ps who might try to participate in this asset type.”
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