The S&P 500 Energy sector makes up about 10% of the entire S&P 500. Ā The sector rallied 23% from late February through June 23rd, and it was one of the top performing sectors in 2014 at that point. Ā But things have turned ugly for Energy lately. Ā Real ugly.
Since it's all-time high on June 23rd, the sector has dropped more than 20%, putting it in bear market territory (along with oil). Ā Below is a table showing stocks within the Energy sector that pay dividends. Ā As shown, every single one is well below its 50-day moving average, with most 10-20% below. Ā A stock that's 10% below its 50-day is pretty oversold, and it's like that across the board in Energy right now.
As prices have declined, dividend yields have gone up for these Energy names. Ā Transocean (RIG) is now yielding more than 10%! Ā Granted, when a stock's dividend yield gets into double-digit territory, it is often a sign that a cut in the dividend is on the horizon, but even mega-caps like Chevron (CVX) and Exxon (XOM) have seen their yields spike. Ā Below are charts showing the dividend yields for XOM and CVX going back to the start of 2012. Ā As shown, XOM's yield is now above 3%, while the yield for CVX has jumped more than 60 bps in just the last few weeks to put it at 3.86%.
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