Total Shareholder Returns from Petroleum Companies and Oilfield Services (2004-2014): Capital Gains and Speculation Dissected to Aid Corporate Strategy and Investor Decisions
Journal of Finance and Accounting
Volume 4, Issue 6, November 2016, Pages: 351-366
Received: Sep. 17, 2016; Accepted: Oct. 25, 2016; Published: Nov. 17, 2016
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Authors
Anita Bressan Bocardo, Harold Vance Department of Petroleum Engineering, Texas A&M University, College Station, USA; State University of Santa Catarina (UDESC), Balneário Camboriú, Santa Catarina, Brazil
Ruud Weijermars, Harold Vance Department of Petroleum Engineering, Texas A&M University, College Station, USA
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Abstract
This study compares the long-term shareholder returns of diversified oil and gas majors, Canadian oil sands producers, US shale oil and gas producers and oilfield services companies during a decade of volatile oil and gas prices (2004-2014). Total shareholder returns (TSR) are analyzed for individual companies, for each peer group, and for the petroleum sector as a whole. We attempt to identify the factors that contributed to TSR growth and decline over the performance period 2004-2014. We specifically compare the performance of each peer group during two relatively stable periods, namely 2004-2007 (Period 1), and 2009-2013 (Period 2). In Period 1, the average TSR for all peer groups was higher than in Period 2. The increase or loss of TSR is in our study broken down into capital gains and dividends. The observed decline of TSR during Period 2 was mainly influenced by stock prices that reflected a slower growth in retained earnings that supports the capital gains. All peer groups had slower increases in retained earnings in 2009-2013 as compared to 2004-2007. Remarkably, during the two oil price crises of 2008 and 2014 all companies maintained an increase in retained earnings. For the 20 companies evaluated, further in-depth analyses of speculative investor valuations are included in our study, as well as implications for future corporate strategies and investor decisions.
Keywords
Total Shareholder Return, Capital Gains, Dividends, Retained Earnings, Speculative Valuation
To cite this article
Anita Bressan Bocardo, Ruud Weijermars, Total Shareholder Returns from Petroleum Companies and Oilfield Services (2004-2014): Capital Gains and Speculation Dissected to Aid Corporate Strategy and Investor Decisions, Journal of Finance and Accounting. Vol. 4, No. 6, 2016, pp. 351-366. doi: 10.11648/j.jfa.20160406.16
Copyright
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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