Why energy is paying MORE than bonds right now (+ my targets)
By Blake Young
I do have favorite numbers. If you've been in the main room with me, you know I talk about this ad nauseum...
68, 78, 68, 78, 68, 78 for crude.
And guess what just happened? Crude's prices have bounced right back into that 68 range.
Here's what nobody's talking about: Energy doesn't need oil to run all the way back to 78 for these companies to print money. Anything above 56 is usually profitable. Anything above 68 is HIGHLY profitable.
We're sitting at 68 right now.
But here's the kicker that's got me fired up...
These energy stocks are now paying MORE than bonds.
XLE: 3.3% dividend yield
Chevron: 4.6%
ExxonMobil: 3.5%
Compare that to the 10-year treasury at 3.83%. You're getting the risk-free premium PLUS upside potential as margins increase.
What I'm seeing right now:
• An inverse head and shoulders pattern that just retested the neckline
• Higher highs, higher lows across multiple energy names
• A dollar that hit record lows yesterday and couldn't find its footing
• Individual breakouts happening in real-time
ExxonMobil just broke out of its monkey bars. I'm looking for a move from 111 up to about 118 this month - that's a 7% move while collecting dividends.
ConocoPhillips? Same story. Targeting 94 to 104 - an 11% move.
But here's the part that changes everything...
If the dollar remains weak after yesterday's failed bounce, we're looking at a continuation of commodities going higher. That means oil, energy stocks, and those high dividend yields while you capture 5% to 12% moves just targeting the next distribution range.
The timing window is critical. Tomorrow's a half day. Friday's closed for July 4th. Earnings season starts end of this month.
The setup is there. The signal is there. The timing is there. The dividends are there.
Watch my complete energy breakdown here
Don't be on the sidelines while energy pays you to wait AND delivers double-digit upside.
-Blake
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