Total S.A. (TOT) Sells LNG to Asia Priced Off Oil Prices

January 15, 2013

Total S.A. (TOT) is working to produce LNG in places like Africa and the Middle East and to sell it in Asian markets where the commodity is priced off the price of oil, in order to make some of the best margins in this industry, says Oswald Clint, Senior Research Analyst at Sanford C. Bernstein & Co., LLC.

“I like the French integrated oil company Total, which is also listed in New York as well. It has 4.9% growth in the next four years, that’s an annual growth number, so almost 5% which is highest at the large caps European majors,” Clint said. “They are taking out gas and putting into Asia priced off of oil prices, so I like that.”

TOT also is involved in African deepwater for its oil production, which creates a positive cash flow. He also says that oil prices are not expected to increase dramatically, remaining mostly flat, and in this environment he prefers companies like Total which are growing volumes.

“Today they can generate high returns and can generate a lot of upfront cash flow. So I am really expecting a great level of volume, so that’s Total. And it’s a stock with a high dividend yield at the moment of 6%. All combined, that’s definitely attractive to me, and that’s one of the stocks I like most,” Clint said.