There are good reasons for that. The environmental movement is strong on the continent. Countries such as France have banned fracking, the advanced technology that unleashes massive quantities of oil and natural gas from existing fields.
But there are changes coming to Europe that should have investors looking at energy companies across the pond. With the economic recovery slowly inching along in Europe, stocks in the oil and natural gas sector from Big Oil such as Royal Dutch Shell (NYSE: RDS-AS) and Total SA (NYSE: TOT), to small caps with tremendous potential like Octagon 88 (NASDAQ: OCTX) look very promising.
European Leaders are Looking at Energy Needs
European leaders are starting to realize that a booming oil and natural gas sector will do a lot to revitalize the economy. Every Euro that a European country exports for oil and natural gas is one less that could be used for job creation at home. There would also be a great deal of tax revenues gushing forth from energy companies. Millions of jobs would be created, too.
For those reasons and more, many European nations are moving forward to allow for fracking within their boundaries.
Changes are Starting Already
Late last year, Spain revised its laws to permit fracking. Poland and Great Britain already allow for it. It is likely that more will follow due to the staggering economic problems of the continent.
In addition to the economic woes of Europe, concerns about the energy and environment also militate in favor on oil and natural gas investing.
Germany, Europe’s biggest economy, has already pledged to do away with all nuclear power. That presents a host of problems that can best be solved by greater oil and natural gas production. Coal is too dirty to be viable for the long term, especially with the green movement on Europe. Alternative energy simply does not have the capability to meet the demands of modern societies anytime soon.
Natural gas and oil, by far, are the most logical choices to meet Europe’s economic, environmental, and energy needs.
How To Invest in European Energy Companies
For investors, there are a wide range of choices for oil and natural gas companies that are headquartered in Europe. Royal Dutch Shell (NYSE: RDS-A), based in Holland, is the biggest on the continent and the second largest in the world. France’s Total SA, England’s BP PLC (NYSE: BP), Spain’s Repsol (PINK: REPYY), and Italy’s Eni SPA (NYSE: E) are all major energy firms with a global presence. For investors looking for growth opportunities in a small cap, there is Switzerland’s Octagon 88.
No matter where the home office, oil and natural gas firms around the world are noted for providing the shareholders with a solid stream of dividend income. That is no different for Europe’s publicly traded energy companies.
The dividend yield for Eni SPA is over 4.9 percent. BP has a dividend yield of 4.70 percent. For Royal Dutch Shell, the dividend yield is just over 4.6 percent. Total SA’s dividend is almost 4.5 percent. It is 3.20 percent for Repsol. The average for a member of the Standard & Poor’s 500 Index is under 1.9 percent.
Many previous articles on this site have been bullish on the oil and natural gas sector, touting great companies such as Exxon Mobil (NYSE: XOM). But not every attractive energy stock has to operate from Houston, like Exxon Mobil. There are many appealing European oil and natural gas firms which should be equally rewarding for long term investors.
Have you looked at Europe for energy investing?
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.