Equinor: too cheap to ignore

Equinor: too cheap to ignore

Today I bought my first 150 shares in Equinor (buy and build) because of the attractive valuation of the company at these levels.

The dividend yield at current level is approx 5.5% and I expect the dividend to increase the next couple of years due to the oil and gas – field “Johan Sverdrup” coming into production. This will add an estimated NOK 1275 to my annual dividend income and increases the yield in my portfolio from 3.9% to 4.0%.

Comment from Pareto Securities (analysis dated 25 July 2019):

Q2 results were well below market expectations but fairly in line with our estimates. With what were known to be a weak quarter now behind us, we believe focus will shift to Equinor’s industry leading 2020-21e FCF yield of 11% (Brent USD 65/bbl) post Sverdrup production start later this year. We reiterate our BUY recommendation and TP of NOK 240.

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