In order for America to realize the full potential of the natural gas revolution, it will take more than just a lot of natural gas in the ground. At the recent EIA Energy Conference, Southern CEO Tom Fanning declared that a stable, secure supply chain is necessary for America to take advantage of this new position of resource abundance.
For investors, what this translates to is that consumers of natural gas will be looking to do business with companies that have strong balance sheets, and that will be around for the long term. When thinking about strong balance sheets, Occidental Petroleum (NYSE:OXY) certainly comes to mind. The company's debt-to-equity ratio below 20% makes it one of the most debt averse of all producers out there right now, which just happens to translate into a respectful 2.5% dividend.
On the other side of the balance sheet, you have the poster child for debt problems, Chesapeake Energy (NYSE:CHK). Despite massive sell-offs to clean up the debt situation, the company is still sporting a debt-to-equity ratio greater than 50%. Learn more about Chesapeake's debt situation and its enormous potential by checking out The Motley Fool's brand-new premium report available here.
Check out the video conversation below with Joel South, Taylor Muckerman, and Fool.com contributor Tyler Crowe to get the scoop on a few other companies that are either sporting strong balance sheets, or struggling to keep up with debt.
Joel South has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. Fool contributor Tyler Crowe has no position in any stocks mentioned. The Motley Fool recommends Southern Company and Ultra Petroleum. The Motley Fool owns shares of Ultra Petroleum and has the following options: Long Jan 2014 $20 Calls on Chesapeake Energy, Long Jan 2014 $30 Calls on Chesapeake Energy, Short Jan 2014 $15 Puts on Chesapeake Energy, Long Jan 2014 $30 Calls on Ultra Petroleum, Long Jan 2014 $40 Calls on Ultra Petroleum, and Long Jan 2014 $50 Calls on Ultra Petroleum. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.