UBS has identified BP, TotalEnergies and Vår Energi as the most compelling European energy stocks in its latest Global Equity Framework update, citing oil-price leverage, dividend support and strategic positioning.
The Swiss bank’s recommendations are anchored in its Equity Compass report and reflect shifts in corporate strategy and financial metrics across the trio. BP leads the list on valuation grounds, trading at the lowest multiple among global oil majors and offering the highest dividend yield in the peer group. The company has refocused its operations on oil and gas after reversing its 2020 strategy at a capital markets day in February 2025, prioritizing debt reduction and capital efficiency. BP produces about 2.4 million barrels of oil equivalent per day, primarily in the U.S., North Africa, the Middle East and Latin America. The group’s financial leverage amplifies its exposure to oil prices, while asset sales—including the disposal of its U.K. North Sea business and Austrian mobility assets—are expected to free capital for higher-return projects. As of August 28, BP’s London-traded shares closed at 514.50 GBP, down 0.17%.
TotalEnergies ranks second on UBS’s list, distinguished by the highest through-cycle profitability among the five major oil companies. The French super-major also holds the number two global position in liquefied natural gas, with particular strength in Africa, and maintains the lowest financial gearing among European peers. Shareholder returns are structured through regular and special dividends alongside share buybacks, underpinned by investment discipline. Capital allocation includes a planned expansion of the Fujairah oil export pipeline in Abu Dhabi and the appointment of a new exploration manager to review Norwegian continental shelf prospects.
Vår Energi, majority-owned by Eni, rounds out the trio with a Norwegian-focused upstream profile. The company produces roughly 450,000 barrels of oil equivalent per day, with 90% of output sourced from Norway. UBS highlights Vår Energi’s near-10% dividend yield, supported by a low unit-cost base. Recent corporate actions include the BlueNord acquisition in the Danish Underground Consortium, expected to cover nearly one quarterly dividend at a 9% dilution for existing shareholders. The company also reported second-quarter adjusted earnings of $0.33 per share on revenue of $3.72 billion, beating analyst estimates, and entered a partnership with Equinor and Aker BP for frontier exploration in Norwegian waters.
