French energy stock TotalEnergies is the fifth-largest integrated energy company in the world, with a $159.7 billion market capitalization. This crude oil, natural gas, biofuels and renewable energy producer just showed up on the IBD 50, our elite list of growth stocks. Strong earnings and sales growth over many quarters characterize these market leaders, with many boasting robust price performance.
The energy stock broke out of a cup base with a buy point of 61.25 on Wednesday.
The strong 97 Composite and 93 Relative Strength Ratings back this bullish price action. The relative strength line is at a 52-week high, confirming superior performance compared with the S&P 500.
Total Energies ranks first in the Oil & Gas-Integrated group, which features the world's biggest energy stocks. Shares are in a buy zone.
Q3 sales of $65 billion marked 32% year-over-year growth, although not as good as the 118% spike in quarterly profit, at $3.83 per share. A special interim dividend of 1 euro per share will be payable to shareholders on record as of Dec. 6.
Increased European demand ahead of the cold winter, aggravated by pipeline shutdowns, is driving growth. These headwinds are generating higher prices for liquefied natural gas.
Total's average LNG selling price rose 54% from the previous quarter while natural gas sales lifted just 5% year over year. This divergence highlights transport issues, aggravated by the war.
Energy Stock's Global Presence
The French-based energy giant has a global presence, with operations in 130 countries. It has petrochemical plants in France and Belgium, produces natural gas in Asia and manages solar plants in Japan.
Its African network of service stations distributes electricity to consumers. In the Middle East, it has operations in oil and gas exploration, production and refinement, and low-carbon energy projects using renewable resources. The company also has a strong presence in Brazil.
TotalEnergies divested Russian assets at the start of the Russia-Ukraine war, selling its 20% interest in the Kharyaga oil project and 49% interest in the Terneftegaz gas plant.
TotalEnergies ESG Initiatives
The energy stock also focuses on transition projects to meet its zero-carbon goal by 2050, in line with IEA and ESG goals.
Total's 60/40 venture with NASF in Houston, Texas, got the International Sustainability and Carbon Certification in November. The venture recycles residue and waste into circular plastics, packaging materials and housewares.
Earlier in October, the multi-energy play reached 500MW in total solar installations for businesses and commercial buildings in the U.S., Europe, the Middle East and Asia. In the third quarter, TotalEnergies acquired a 50% stake in U.S. solar and wind facility operator Clearway Energy Group for $1.62 billion.
In the near term, this energy stock is poised to benefit from sanctions on Russian oil, coming into effect on Dec. 5. As Europe heads into the winter months, local and U.S. oil producers will need to meet the growing demand.
Follow VRamakrishnan on Twitter at @IBD_VRamakrishnan.
