The tensions around Iran have driven Oil prices this year, first up and then again drop. For Oil companies it was, therefore, so far not a good year for the market. "But behind the pure business pay more," says Peter Sainsbury, the "Contrarian Investor"Podcast.

He compares the situation of the Oil industry – or, in General, of energy companies that rely on fossil fuels such as natural gas and coal – with the tobacco industry in the late 1990s. "Cigarette manufacturers at the time were feared, hated, even despised. There were plenty of lawsuits because of the health consequences of tobacco, in short: It was an unpopular industry.“

investors refuse to put money into oil Projects

Since then, the tobacco companies have changed, but British American Tobacco about lost from 1998 to 2000, about 65 percent of its stock market value, has increased since then, but by 722 percent. For comparison: The American stock exchange index and the S&P in the same period has only increased by 128 percent.

"Today, Oil is a 'sin stock'," says Sainsbury, and would thus be in a drawer with arms companies and the alcohol producers. "The Problem with this Image is that few investors are willing to invest in such shares." Christoph Sackmann gains of the Oil companies in the past five years.

This is currently well illustrated by the example of Oil, natural gas and coal: The Norwegian sovereign wealth Fund, one of the largest Fund in the world, announced, for example, last October, to reduce its investment in fossil fuels. Goldman Sachs ended in December, all the credits for Drilling for oil in the Arctic and the European investment Bank (EIB) is to promote, starting in 2021, no fossil energy projects.

billion lawsuits plating Oil industry

in Addition, the suits who want to make Oil companies for the climate change is liable to accumulate. In the US, for example, 13 cities, counties and States have sued more than 24 Oil companies to billions. Your accusation: The industry knew since the 1970s that their business is accelerating climate change, have kept this a secret and even disinformation campaigns instigated.

The accusation is just as difficult as against the tobacco industry 25 years ago. In 1998, Philip Morris and other US agreed about heavy weights, an advertising ban and compensation payments of more than $ 200 billion over 25 years. The charge at the time: The company had long known of the harmful consequences of their products, but as a harmless touted, and thus illness and death of customer in purchase taken. Today, more than 400 lawsuits against tobacco companies around the world still. With Stock Selection in Europe, you will be able to achieve excess Returns with the System. You put on the strongest trend signals from Germany and Europe. Long and Short. So make your investment a success, regardless of the DAX level. (Partner quote) Here is an exclusive free trial!

Oil companies are trying to less CO2 emissions

The cigarette manufacturers responded to stronger health awareness of the society in the past years, with less harmful products: Electronic cigarettes, Tobacco vaporizers and Vaping are the answers to the crisis of the traditional cigarette.

"In the beginning, we see that in the Oil industry," says Sainsbury, and that Shell turn increasingly to Oil and natural gas to minimize although this is only a small step, the own CO2 footprint. "I think in the near future we will see much more aggressive movements," says Sainsbury.

Such changes in the business model are usually associated with high costs. "That is definitely a headwind for the share prices," says Sainsbury. It does not mean necessarily that the shares of Oil companies will fall, but they may grow for a number of years to be weaker than the market as a whole. db Oil price WTI 51,36 USD +0,36 (+0,71%) OTC

• 1 day
• 6 months

course data

share prices are likely to over years of lagging behind

An evaluation of the past five years shows this trend already. Although discussion of the decline of Oil prices in 2014 and the emergence of an American Fracking company is here in addition to climate change-a role, but hardly one of the ten largest Oil companies managed to increase their share price in a sustainable way. An exception to Russian giants such as Lukoil and Rosneft, which were able to double their value in the same period of time almost are.

To change the Oil companies could also invest more in alternative forms of energy, for example Wind or solar parks. "But as the companies today are set up, you can't switch completely," says Sainsbury. That would probably take decades. Christoph Sackmann dividend yield of the Companies in average in the last five years.

Until then, Oil companies remains the only way to own stock attractive for investors: "The dividends must be higher than the average," says Sainsbury. Then, investors are ready to jump their moral shadows and to invest in fossil fuels. In fact, many Oil companies will go this way: The dividend yield of BP in the past five years, on average, about 7.5 per cent, in the case of Shell, it was 6.7 percent.

follow the author on Facebook

follow the author on Twitter

read also: the flood of money and low interest rates - The Federal cross of merit for Draghi is an Affront to all savers

the desert air up to 20 degrees – then the freezing weather change PCP rain wave comes rolling on in Germany: desert air up to 20 degrees – then the icy change in the weather

comes Date Of Update: 03 February 2020, 15:00