XOM - Is Vermillion Energy a Great Dividend Stock?
Canadian oil driller Vermillion Energy (NYSE: VET) has a massive 14% dividend yield. That's around seven times the yield on offer from an S&P 500 Index fund. That certainly sounds great, but there's a lot more for investors to understand before they jump aboard this relatively tiny energy stock.
Vermillion Energy hails from Canada and has a $2.3 billion market cap. While not exactly a small company, it competes against names like ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX), which have market caps of roughly $290 billion and $230 billion, respectively. Normally you wouldn't even compare Vermillion to names like these (it doesn't have downstream assets like the integrated giants, for one thing), but its drilling-focused business is actually spread around the world -- just like those of the energy majors. Roughly two-thirds of Vermillion's production comes from Canada and the United States, with the rest coming from Europe and Australia. Europe and Australia provide about half of its free cash flow, though, so it is definitely not a regional player.
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