Daily Stock Pick: Eni

A portfolio of stocks I've been building since September 3 is named Volio Folio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!

Today I'm reviewing the second of five energy stocks striving to be picked to join the Volio folio. This could be the eleventh pick for Volio!

That energy sector includes six industries all related to bringing oil and gas to market. They are: drilling, exploration and production (E&P), equipment and services, integrated, midstream, refining & marketing. (Yes, those are the six oily and gassy enterprises.)

My subject today is another large-cap oil & gas integrated company named, Eni SpA Their trading ticker symbol is E. This is my first report on Royal Eni SpA.

Eni is an integrated oil and gas company that explores for, produces, and refines oil around the world.

In 2018, the company produced 0.9 million barrels of liquids and 4.6 billion cubic feet of natural gas per day. At year-end 2018, Eni held reserves of 6.8 billion barrels of oil equivalent, 52% of which are liquids.

Further, the company is involved in commodity trading and derivatives.

The Italian government has de facto control of Eni through a 30.1% stake in the company.

Eni S.p.A. was founded in 1953 and is headquartered in Rome, Italy.

I use three key data points to gauge dividend-paying equities or funds like Eni SpA:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.

Those three basic keys, however, best tell whether a company has made, is making, and will make money.

E Price

Eni's price per share closed at $31.24 yesterday. A year ago its price was $34.64. In the past year, its price fell to $3.40 or 9.8%.

Assuming Eni's stock trades in a range of $28 to $36 this next year, it's recent $31.24 price could rise by $4.76 and might get to $36.00 by mid-November, 2020, assuming some upward price momentum kicks-in.

E Dividends

Eni's latest declared semi-annual dividend was $0.94, paid October 10th.

That $0.94 SA dividend has varied and might equate to $1.88 annually to yield 6.01% based on yesterday's $31.24 closing price.

E Gains?

Adding the $1.88 annual estimated dividend to my $4.76 estimate of Eni's price upside shows a $5.64 potential gross gain, per share, which will be reduced by any costs to trade these shares.

Say we put a little under $1,000.00 today into Eni SpA at its recent $31.24 price, we'd buy 32 shares of E.

A $10 broker fee paid half at purchase and half at sale could cost us about $0.31 per share.

Subtract that $0.31 brokerage cost from the estimated $5.64 gross estimated gain per share leaves a net gain of $5.33 X 32 shares = $170.56 or a 15.6% net gain on a $999.68 investment.

Therefore, Eni SpA, whose trading ticker symbol is E shows a possible 15.6% net gain including a 6.01% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to learn if Eni SpA is worth your time and money.