If you've caught any of our recent coverage of the other supermajor oil companies, Total's
After viewing the weak group-wide upstream results, perhaps you're wondering why the integrated oils don't shift more toward the downstream -- that is, to the refining and marketing segments that are showing a lot more buoyancy these days. Despite appearances, upstream exploration and production is still the most profitable segment of the oil and gas chain. For Total, the upstream's return on average capital employed -- an industry variant of the more familiar return on equity -- is running at 34%, versus downstream's 25%. There is no reason to expect those numbers to converge, so the upstream will continue to draw the heaviest capital investment.
This state of affairs favors a company like Total, which, along with ExxonMobil
While Total is facing plenty of political drama in countries like Iran and Nigeria, that's pretty much par for the course. One can only expect the oil business to get more political, not less, as NOCs (national oil companies) such as Petrobras
Total is relevant to income investors as well. That's why the Motley Fool Income Investor team tapped the company back in 2004. To see what other solid dividend-payers have been recommended, take the service out for a free 30-day test drive.