My latest for @bopinion @BloombergNEF, on energy and oil&gas: what was once growth is now value, and vice versa bloomberg.com/opinion/articl…
Check out the dividend yield of the S&P500 Energy (mostly oil & gas) and Utility indexes. Energy now has a higher yield than utilities bloomberg.com/opinion/articl… 
Part of that trend is due to utility bond yields being towed down along with the general bull market in bonds... bloomberg.com/opinion/articl…
...but that's not all of it. As @liamdenning said it,
"There is also a potentially more interesting interpretation to consider here: What was growth is now viewed as value, and vice versa."
bloomberg.com/opinion/articl…
"There is also a potentially more interesting interpretation to consider here: What was growth is now viewed as value, and vice versa."
bloomberg.com/opinion/articl…
The first decade of this century was dominated by China’s commodity-hungry growth spurt and fears of peak oil supply. The oil business was spewing cash, but also investing a lot of it in new fields. bloomberg.com/opinion/articl…
After the brief buzzkill of the financial crisis, the Arab Spring pushed oil back into triple digits, making this seem like the new normal and spurring yet more drilling, including in U.S. shale. bloomberg.com/opinion/articl…
This was a time when you owned oil stocks for growth and were OK with cash flow going into the ground rather than your pocket. bloomberg.com/opinion/articl…
Hence, it is also the only time in several decades when the energy sector’s dividend yield dipped below that of the S&P 500. bloomberg.com/opinion/articl…
That all changed with the oil crash beginning in late 2014. Investors woke up to the reality that the world was awash with oil and the industry’s investment binge had trashed return on capital. bloomberg.com/opinion/articl…
Meanwhile, growing awareness of climate change and the appearance of actually desirable electric vehicles flipped fear of peak oil supply to speculation about peak demand. bloomberg.com/opinion/articl…
The other sea change is protectionism, putting a damper on economic growth and a question mark over the future of global supply chains, including those for traded energy. bloomberg.com/opinion/articl…
Utilities, meanwhile, continue to enjoy reasonably steady earnings growth. While U.S. electricity demand has flatlined, demand doesn’t drive earnings for regulated utilities; investment in old grids (including for gas) does, and that has kept on going. bloomberg.com/opinion/articl…
In other words, a utility with ever-expanding capital expenditures rewards investors regardless of demand for electrons. The same cannot be said for oil and gas spending. bloomberg.com/opinion/articl…
Markets think in narratives - and the electricity narrative is one of growth, even if 4-5% growth isn't the double digits that U.S. shale producers have touted. bloomberg.com/opinion/articl…
Utility capex investment now exceeds oil & gas capex too - since 2016 - according to the @IEA. It's the sort of growth story that attracts @Shell, for one, to electricity. Nice quote here from on of its executives bloomberg.com/opinion/articl…
What was once growth, is now value. Money has moved into utilities, attracted by the dividends, yes, but also the promise of growth. With their own growth narrative having ebbed, oil and gas producers must pay investors to hold their stocks. bloomberg.com/opinion/articl… /end
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