The Motley Fool Take

Energetic Dividends

France-based integrated oil giant TotalEnergies SE (NYSE: TTE) is a good fit for dividend-seeking investors interested in the energy sector, and in the transition from carbon fuels to cleaner energy sources.

TotalEnergies’ operations span from upstream (exploration and drilling) to downstream (refining and chemicals). It’s reworking its portfolio to focus only on its best oil investments, while expanding its footprint in cleaner-burning natural gas and boosting its operations in renewables and electricity. Its ambition is “to become the responsible energy company,” and it plans to spend roughly half its annual capital spending budget of $13 billion to $15 billion on growth businesses over the next four years, with much of that earmarked for natural gas and renewable power.

Meanwhile, TotalEnergies is a robust dividend payer, with its payout recently yielding 6.1%. It recently updated its dividend outlook, noting that oil prices averaging above $50 per barrel could lead to dividend increases. (Oil was recently trading in the $80-per-barrel range.) TotalEnergies is also buying back $1.5 billion worth of stock as a way to return value to shareholders.

To be sure, TotalEnergies has its flaws; for instance, it has more debt than many of its U.S.-based peers. However, its dividend commitment and its efforts to change its portfolio while continuing to grow its business make it an attractive energy investment for long-term investors.

My Dumbest Investment

Dot-Com Bomb

My dumbest investment was in shares of eToys, way back when. I figured: What could be better for parents than being able to find toys online and have them shipped to your door without your kids hounding you for things they see in toy stores? Brilliant. Unfortunately, eToys was one of the first dot-com companies to absolutely tank, pretty much to zero. Good thing I didn’t have much money invested at the time! — O.S.B., online

The Fool responds: The company had quite a short life: eToys was founded in 1997 and went public in 1999; it filed for bankruptcy protection in 2001, shortly after losing some 99% of its value and laying off 70% of its workforce.

What went wrong? Well, the company spent a lot on marketing and products to fill warehouses — and on acquisitions; for example, it bought BabyCenter with shares worth around $150 million at the time. (Johnson & Johnson later bought BabyCenter for $10 million.)

Fortunately, you didn’t lose too much. It’s great to find companies with ideas and plans that seem like they can’t lose — but sometimes they do. Investors can even lose a lot when investing in great companies by overpaying for the shares. (Many good companies had wildly overvalued stocks before the internet bubble burst in 2000.) It’s often best to wait for not-yet-profitable companies to start posting profits, or to at least post shrinking losses.