TotalEnergies has a rich history of beginning as an oil company in France. Over the years, the company has experienced significant growth, both organically and through strategic acquisitions. Today, TotalEnergies operates in more than 130 countries and has a diversified corporate structure that includes crucial business segments such as Exploration and Production, Refining and Chemicals, Marketing and Services, and Renewable Energies. Additionally, the company has established a series of subsidiaries and joint ventures worldwide to enhance its global presence and diversify its activities.
TotalEnergies holds a vast portfolio of assets worldwide. Regarding hydrocarbon production, the company operates in various countries, including major oil and gas projects in the Gulf of Mexico, Africa, the Middle East, and the North Sea. Furthermore, TotalEnergies is a significant player in the refining sector, with substantial refining capacity in several countries. The company is also involved in the marketing and distributing of petroleum products and natural gas, with a global network of service stations and marketing activities across Europe, Asia, Africa, and the Americas.
TotalEnergies has adopted a business strategy focused on integration and diversification. The company aims to balance its asset portfolio between conventional hydrocarbons and renewable energies, seeking to adapt to the energy transition and reduce its carbon footprint. TotalEnergies has made significant investments in renewable energies, including solar, wind, energy storage, and biofuels. Additionally, the company has formed strategic partnerships and acquired specialized renewable energy companies to accelerate its growth in this sector.
In line with the growing awareness of sustainability and climate change, TotalEnergies is committed to reducing its carbon footprint and promoting a transition to a more sustainable energy model. The company has set ambitious emission reduction targets and invests in low-carbon technologies and projects. TotalEnergies is also developing innovative solutions to address the challenges of the energy transition, such as carbon capture and storage, electric mobility, and alternative fuel production.
Regarding its current financial situation, TotalEnergies’ financial results have shown consistency in recent years regarding revenue. In the latest financial report for the second quarter of 2023, the company reported revenues of $51.5 billion, representing a 26% decrease compared to the same period in the previous year when they reported revenues of $70.4 billion. However, let’s compare payments from recent years, which show an average annual increase of 21% since 2019.
It is a positive sign that the company has maintained revenue growth in recent years. As for net profit, the company reported a profit of $4 billion for the second quarter of 2023, a 28% decrease compared to the same period in the previous year when it reported net income of $5.6 billion. However, let’s compare its net profit since 2019. We see an average annual growth rate of 61%, which is very positive for the company, as they have maintained growth in both revenue and net income, which is very favorable for a company with a long history.
Analyzing the company’s financial ratios, we see very relevant data for investors, starting with profitability ratios, where we have an ROI of 14.40%, which is crucial for a company with a long history. Additionally, they generate value for their shareholders with an ROE of 16.80%, which generally shows very healthy profitability ratios. On the other hand, we have debt ratios below 1, indicating that the company does not have excessive financial leverage and does not pose an operational risk to the company.
Finally, there are two crucial points to consider for an investment decision in this company. Firstly, the company generates an annual dividend yield of 4.70%, which helps reduce the long-term investment risk. Secondly, it has a beta of 0.81, indicating low volatility, which contributes to diversifying the risks in our long-term investment portfolio.
To complement our fundamental analysis, analyzing the stock price chart to identify optimal entry points from a technical analysis perspective is essential. The first thing we can observe is support around the $41.21 zone, and the next significant point is the resistance found around the $65.36 zone, where we would expect a breakout and confirmation for an optimal entry point. However, it is an excellent stock for long-term investment due to its financial solidity, dividend yield, and price volatility.