Cabot Dividend Investor 919
September 25, 2019
A huge new industry is being born in American energy exports.
Because of new technologies in fracking and horizontal drilling, America has gone from being hopelessly dependent on energy imports to the world’s preeminent energy powerhouse and the number one producer of both oil and gas in less than ten years.
Last month, the US was actually the world’s largest exporter of crude oil. That’s amazing. But the future is in the lesser understood fossil fuel – natural gas. As the cleanest burning fossil fuel, demand for natural gas is exploding across the globe.
It is the world’s fastest growing fuel source and demand is expected to increase 50% over the next couple of decades. At the same time, America has way more natural gas than it can use. And it often fetches four or five times the price of US natural gas in other countries.
In order to export natural gas across the oceans, it needs to be converted to liquid form (LNG), loaded onto tankers and shipped overseas. Until recently, the US did not have the facilities necessary to do that. But one company was the first to have such facilities and it’s up and running. And business is booming with no end in sight.
This month’s “featured buy” operates the first and largest US LNG terminal, while LNG is the fastest growing commodity in the world. The stock has blown away the returns of the S&P 500 at a time when stocks in the energy sector were the worst performing on the market. Yet the stock is still reasonably valued and pays monstrous and growing 5.15% yield.Read This Issue