For almost a year now, the oil prices are going down. As a DGI with almost 15% of my Vrijheid Fonds invested in oil (related) stocks, this is not funny. Because when the oil prices drops, the stock prices of oil companies are going down also. And when you read the press releases of these companies, you know that these companies do everything possible to maintain the dividend, but the prices of many oil stocks are much lower than a year ago. But hey, no problem, I’m in it for the long run, so these times give me beautiful buying opportunities.
Besides an investor, I’m also a consumer (psst. Don’t tell anyone I’m human 😉 ). And, as a consumer, I’m happy with a lower oil price. I save a lot on petrol. Money that I can use for other things, e.g. saving / investing / home improvement / lowering my mortgage, just to name a few things.
Last night I was thinking about this and had a question. I, as a consumer benefit from lower oil prices, but which companies/sectors do also benefit from it?
Of course you have the obvious answer: Airlines (transport sector). But that is not a sector into which I’m willing to invest right now. Okay, let’s watch beyond the obvious.
Which products are made of oil…? Which company has lower production cost lately?
When I thought about this, I was walking around in my house. And in the kitchen, when reaching in the fridge for something to drink, I saw it. Of course: The plastic industry. Plastic is made from oil. (And yes I was reaching for a coke 😉 ).
A lot of companies sell their products in plastic packaging. And when it is empty, the wrapping/container goes straight in the trash (Yes we recycle and collect the plastic separate from the other trash – but that’s a whole other (important) story).
In my Vrijheid Fonds I have companies that use plastics. Unilever (UN.AS), Proctor & Gamble (PG), Coca Cola (KO) and Johnson&Johnson (JNJ) use plastics for various product wrappings. So as an investor I already will benefit from lower oil prices.
But maybe there are more. So my search will continue. I will start looking among the Dividend Aristocrats.
Do you know great companies who are benefiting from lower oil prices? Which companies are worth investing in your opinion?
I like to hear from you!