Investors looking for high “oily” yields may want to take a trip south — way south — down to Colombia. The rout in emerging markets has left many stocks within Latin America reeling and could result in huge bargains for long-term investors.
One such bargain is energy producer Ecopetrol (EC).
The company operates an integrated energy producer in the fast growing emerging market nation, with assets spanning up- mid- and downstream operations. However, like many of the majors, EC has been fraught with low production and dwindling reserves for the past few quarters.
But there’s hope on the horizon for EC and its shareholders.
The firm has recently made some commercially viable discoveries with partner Talisman (TLM) in Colombia. Those new fields should help begin to turn the tide for EC’s production/reserve woes. At the same time, Ecopetrol has unveiled a pretty expansive CAPEX budget with the focus on exploring for new reserves.
Meanwhile, EC shares yield a very juicy 7.2% yield. Investors buying in at current prices are being paid nicely to wait for the turnaround.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.