The world is shifting away from carbon fuels and toward clean energy sources like solar and wind. That isn't in dispute, but it isn't the whole story, either. While clean energy is growing, oil and natural gas are still vital and necessary. That's exactly why France's Total (NYSE:TOT), and its fat 7% dividend yield, could be one of the best options for investors in the energy patch. Here's what you need to understand.

1. Oil is not dead

Even the most aggressive clean energy projections out there recognize that oil and natural gas are going to remain important to the world's energy markets for decades to come. The logic isn't complicated, either. You can't simply replace the current infrastructure overnight -- it will take time. ExxonMobil (NYSE:XOM), for example, has highlighted that it took 100 years for oil to displace coal as the biggest player in energy. While this transition may be quicker, there's still a long way to go before carbon fuels are dead. 

A man turning valves on an energy pipeline.

Image source: Getty Images.

In fact, natural gas demand is expected to remain fairly strong even as oil demand declines because the cleaner burning fuel is being used to help the transition toward the low carbon future. Total is committed to its oil and natural gas businesses, looking to focus on its lowest-cost opportunities so it can compete even if energy prices remain low. This is important, because the company has stressed multiple times that it believes its dividend is sustainable even if oil prices average around $40 a barrel. Meanwhile, natural gas is expected to take on a more prominent role in the company's energy mix over the next decade (growing from 45% to 50% of sales) as Total looks to provide the world with the energy it wants most. 

2. More than carbon

As natural gas is growing in importance at Total, oil will be decreasing, dropping from 50% of sales to 35%. Making up the balance will be the company's "electrons" business, which will expand from 5% of sales to 15%. This isn't a new business shift, either -- Total has been investing in clean energy and electricity assets for some time now. That includes things like solar and wind power, electric vehicle charging stations, and even European utility assets. The key is that Total is using its cash cow energy business to fund its growth into the "electrons" space. 

Adding to the allure here is the fact that this trend hasn't slowed down because of the global pandemic. As noted above, Total is very comfortable with oil hovering at relatively low levels while it continues to change along with the times. A key factor in that is its balance sheet. While long-term debt comes in at around $61.5 billion, the company also has roughly $30.5 billion in cash on hand. Total pegs its net debt to capital ratio at a fairly modest 22%. When you look at that number, there's little reason to fear that Total won't be able to adapt with the world around it. 

3. Out of sight, out of mind

But why Total over other integrated energy giants? For starters, it has stated a willingness to hold the line on its dividend while it shifts toward clean energy. Peers BP and Royal Dutch Shell both cut their dividends when they announced similar transition plans. Second, Exxon and Chevron have both made clear that they are going to be sticking to oil for now. Total is taking a more middle-of-the-road approach, which, as you might expect, hasn't garnered it much attention. And third, the real point here, Total's business is light on the Americas. In fact, the Americas, which includes North, Central, and South America, make up just about 12% of Total's production, and 23% of its petroleum product sales. 

TOT Chart

TOT data by YCharts

So as a new administration comes into the White House openly calling for curtailments in U.S. energy production, there's little risk that Total's business will be materially disrupted. Its business in Europe, Asia, the Middle East, and Africa provide ample diversification. Moreover, it will avoid much of the headline risk that its U.S. peers will likely face.

In fact, Total doesn't make headlines very often at all in the United States. Not being a big name in the U.S. market is a part of that, but so too is its kind of boring plan to shift slowly toward clean energy. As the U.S. media decries the evils of oil giants like Chevron and Exxon, and the investment world focuses on the recent dividend cuts at BP and Shell, Total looks like a forgotten stepchild. That makes it a little easier to own, since you don't have to deal with the negative press. 

More than three

This list of three reasons to like Total is really more like six or seven reasons shoved into three broad boxes. To boil it down, though, Total is quietly going about running its diversified "cash cow" energy business in a way that should both support its generous dividend and fund a slow and steady transition toward clean energy. If you don't mind collecting a 7% dividend yield while it executes this plan, even if it doesn't get many accolades for its efforts, Total could be a great option for you.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.