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The old adage "sell in May and go away" has probably caused a lot of investors to miss out on some promising stocks, and that's likely to be the case again this year. Instead of selling, May might just be an excellent time to buy -- especially for long-term investors looking for timely opportunities to add great companies to their portfolios.
Three Motley Fool energy experts have already put in the work to help you get started, having identified integrated oil and gas super-major Royal Dutch Shell plc (ADR) (NYSE: RDS-A)(NYSE: RDS-B), surprisingly diverse sand supplier U.S. Silica Holdings Inc (NYSE: SLCA), and still-cheap, still-strong wind turbine leader Vestas Wind Systems (NASDAQOTH: VWDRY). Keep reading for unique, real-investor insight on what makes these three energy stocks worth buying this month.
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Fueling the future
John Bromels (Royal Dutch Shell): Not only will Shell's stellar dividend yield -- currently about 5.4% -- start putting money in your pocket right away, but the moves management is making to prepare for the future mean it should still be paying off for investors in five, 10, or even 20 years down the road.
One reason Shell is doing so well right now is, of course, high oil prices. With Brent crude prices above $60/barrel for more than six months -- and closing in on $80/barrel today -- the whole industry is benefiting. But thanks to strict cost-cutting measures that Shell implemented during the oil price downturn, it's benefiting more than most. Look no further than the company's most recent quarter, Q1 2018, for proof: Net income was up 66.7% year over year to $5.9 billion, plus the company is paying off short-term debt and raking in cash.
But suppose oil prices come back down...what then? Well, Shell CEO Ben Van Beurden has been thinking the same thing. That's why he's moved aggressively to expand Shell's liquefied natural gas business, a market he -- and many an analyst -- expects will grow even faster than oil in coming years. That should help keep the company afloat even if the oil market softens.
Shell expects to start a share repurchase program soon, and smart investors will want to be on board before then. May is the perfect time to buy this industry powerhouse.
Strong market for sand, with some diversity just in case
Tyler Crowe (U.S. Silica Holdings): Prior to the oil price crash from 2014 to 2016, companies that supplied hydraulic fracturing sand were some of the hottest stocks in the market. The euphoria around the U.S. growing its production for the first time in over 30 years and the idea of energy independence made many people forget that oil and gas -- and everything associated with it -- is a commodity. Frack sand producers were probably hit the hardest because most of them were building out capacity and taking on quite a bit of debt to do it. So when demand dried up, they were caught with their pants down, and stock prices reacted accordingly.