Typically, funds in this category consist of stocks trading at attractive valuations and/or having above-average fundamentals,” according to AltaVista.
Still, there are causes for concern extending beyond low oil prices, notably Chevron (NYSE: CVX) not yet raising its dividend, imperiling a 27-year increase streak. Chevron is XLE’s second-largest holding. Chevron usually raises its dividend in April, around the same time as Exxon. Like Exxon, Chevron is a dividend aristocrat by way of a payout increase streak spanning 27 years. Chevron, also a Dow component, suspended its share buyback plan earlier this year, prompting some concern about the steadiness of the dividend increase streak. [A big if for a big Energy ETF]
Profit expectations have fallen dramatically which in turn has pushed the sector’s P/E ratio much higher even as stock prices have declined, though P/Es have come off their highs and estimates appear to have stablized,” according to AltaVista.
Energy Select Sector SPDR
