The S&P 500 Energy sector makes up about 10% of the entire S&P 500. The sector rallied 23% from late February through June 23rd, and it was one of the top performing sectors in 2014 at that point. But things have turned ugly for Energy lately. 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). Below is a table showing stocks within the Energy sector that pay dividends. As shown, every single one is well below its 50-day moving average, with most 10-20% below. 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. Transocean (RIG) is now yielding more than 10%! 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. Below are charts showing the dividend yields for XOM and CVX going back to the start of 2012. 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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