over 3 years ago • 3 mins
Spanish oil company Repsol unveiled a new five-year strategic plan on Thursday. Step one: make oil a thing of the past… 👋
After a brutal year for oil companies the world over, Repsol is doubling down on its transition away from the slippery elixir: it’ll spend around $6.5 billion growing its renewable energy business fivefold by 2025 ♻️ At the same time, the company’s planning to cut spending on exploration and production by 15%, and instead focus its efforts on a few countries where production offers more value for money. It’ll then funnel whatever it earns straight back into segments like wind and solar – with the aim of making its renewable business a more, ahem, sustainable one in the long term.
Repsol was into renewables before other oil companies thought they were cool: the company pledged last year to cut or offset its emissions, and said last month it’s already spending more on renewable energy than on oil-drilling 🛢 That early move has had ripple effects across the industry, with bigger European rivals including Total, Shell, and BP all following – if not one-upping – its example. And if that pioneering mindset is the kind you want to invest in, you might be able to very soon: Repsol’s thinking about listing its low-carbon business on the stock market in the next two years.
Repsol also announced it’d be reducing its dividend from €1 a share to 60 euro cents next year, but said it expects payouts to start growing again from 2023 💶 Still, that might not go down well with its investors, who see dividends’ steady income as something of a holy grail. BP and Shell’s decision to do the same thing earlier in the year certainly didn’t: investors made their stock prices pay dearly for the move.
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Tesla would like to thank its mom, its dad, and its BFFs, because fresh analysis this week showed the electric carmaker is the most popular company with European investors 👑
What does this mean?
Invezz.com looked at 31 European countries’ Google habits to work out which stocks investors are searching for most – and, by extension, which they’re most interested in investing in. And it was Tesla that took the top spot, winning the day in 26 of the 31 countries and featuring in every top ten but one – a feat only Apple and Amazon could match.
European companies, meanwhile, were nowhere to be seen in the overall top ten, even though it included Chinese companies like ecommerce giant Alibaba and electric vehicle maker NIO 🌏 That might be because investors seemed particularly interested in fast-growing tech companies, which humdrum European stock markets are notoriously short on.
It’s easy to see why investors would want in on the Tesla action: the carmaker’s share price is six times higher than it was at the start of 2020, not to mention the growing trend toward more climate-friendly companies 🌿 But there’s also a real risk of so-called “performance-chasing”, which can lead FOMO-fueled investors to buy stocks at their highest levels. They’d probably be better off just following Warren Buffett’s advice: “Be fearful when others are greedy, and greedy when others are fearful”.
You can pick individual stocks like Tesla to invest in, but even professional investment managers struggle to choose stocks that consistently outperform the overall stock market. So it’s perhaps no surprise that the simple and low-cost solution of exchange-traded funds – which can track indexes as a whole – have become such a hit with investors 🎉 By buying a slice of the Teslas, Apples, and Amazons all in one, you reap the rewards of their successes without getting dragged down too much when they make a mess of things.
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