XLE Energy Sector SPDR ETF - My Tactical Bet On the Middle East Conflict
๐๐๐Oil prices rose this week on news that Iran has fired about 200 ballistic missiles at Israel. Thousands of US dockworkers have also gone on strike. $Energy Select Sector SPDR Fund(XLE)$
XLE offers exposure to US Energy Giants that is within the S&P500 Universe. The Top 10 holdings include Exxon Mobil, Chevron Corp, Conoco Phillips, Schlumberger, EOG Resources, Williams Corporation, Phillips 66, Marathon Petroleum, ONEOK Inc, Valero Energy Corporation and Kinder Morgan Inc.
Exxon Mobil and Chevron take up 38% weightage of the ETF. The Top 10 holdings weightage is 75%. Total number of holdings is 24.
The expense ratio is 0.09% one of the lowest among similar competing ETFs. Dividends are paid every 3 months. The current dividend yield is 3.49%. XLE goes ex dividend on December 23 2024.
$Exxon Mobil(XOM)$
Exxon posted a net income of USD 9.2 billion, a 17% increase compared to USD 7.9 billion in the previous year quarter. The acquisition of Pioneer Natural which closed in May, contributed USD 500 million to Exxon's earnings.
Exxon's share price is up 9.3% in the past 5 days and has risen 18.7% year todate.
$Chevron(CVX)$
Chevron missed 2nd quarter earnings expectations. This is due to lower refining margins as well as delays from its pending acquisition of Hess Corp.
For the latest quarter, Chevron's EPS was USD 2.55 versus USD 2.93 expected. Revenue was USD 51.18 billion which was better than USD 50.8 billion expected.
Chevron's US production segment posted a profit of USD 2.16 billion, a 31% increase over USD 1.64 billion in the previous year quarter on higher sales volumes and oil prices.
These are just the 2 top holdings of XLE.
Performance wise XLE is up 6% in the past 5 days and 7% year todate. In 2023, XLE has risen 2.4%. However if we look back at 5 years ago, XLE has jumped 58%. Since its inception in December 1998, XLE is up 299%. XLE is also the largest ETF in the Energy sector with Assets Under Management of USD 35.2 billion.
Wall Street Analysts are bullish on XLE with a Buy rating, average Target price of USD 105.68, an upside potential of 16%. This is according to 24 analysts surveyed by Tipranks.
What I like about XLE is that it does the heavy lifting for me as it choose the best performing stocks and take out the non performing ones.
I also like the nice juicy dividends of XLE of 3.49% which is paid every 3 months.
I have invested in XLE since 2021, just before the Russia Ukraine war and since then it has rewarded me well both with capital appreciation and great dividends.
Investing is a marathon, not a sprint for me and it is time in the markets that counts, not timing the markets.
@Daily_Discussion @TigerStars @Tiger_comments @MillionaireTiger @CaptainTiger
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