Due in part to the dollar’s strength and sliding oil prices, the recent trend in analysts’ full-year earnings estimates for the energy sector has been lower. Speculation of dividend reductions by some offshore drilling firms has been a drag on the energy sector as well, but it is worth noting the largest oil services providers have recently been impressive dividend growers. [Behind Oil Services ETFs’ Problems]
Additionally, XLE’s payout ratio of just 32.1% indicates many of the ETF’s 46 holdings are not burdened by their payout and have room for future dividend growth.
AltaVista’s P/E estimate for 2014 for the energy sector is 14.8 with a price-to-book ratio of 1.9. Those numbers are estimated to be 13.4 and 1.7 for 2015.
Energy Select Sector SPDR
