Eni shares: Why the six-legged dog stock can run despite banking turbulence

If you've been keeping an eye on Eni shares these past few weeks while also glancing at movements in the banking world, you might have noticed a curious phenomenon: while Piazza Affari is shaken by the battle for the Banco BPM board and the moves of Credit Agricole, the six-legged dog stock seems to be moving on an almost parallel track, showing a resilience that deserves a closer look. That's no coincidence, and today I want to explain why.

The background noise of the banking system and the effect on Eni

In recent weeks, the banking M&A scene has captured attention: Credit Agricole counting seats on the new board of Banco BPM, the upcoming board meeting to finalise the slate, and the usual whispers of mergers in the background. All of this creates volatility, especially for stocks like Banco BPM itself and, in some ways, doValue, which is affected indirectly. But the long-term investor knows that the true barometer of the Italian market, at least in terms of market cap and weight in the real economy, remains energy. And here, Eni shares are the main benchmark.

While banks squabble over board seats (and sometimes overly opaque strategies), Eni keeps churning out profits and paying dividends. The question many are asking is: is this divergence set to last, or will the energy stock be sucked into the vortex of the banking sector? My view is that Eni's fundamentals are now more solid than they've ever been, and that the banking drama, however important, remains a side event for those betting on oil and the energy transition.

Eni's fundamentals: What the numbers tell us

Those who have followed the stock for years know that Eni is no longer just the oil company it once was. Today we're talking about an entity structured across multiple businesses: from traditional exploration to green chemistry (Versalis), from renewables (Plenitude) to bio-refining. And the results show it. There's no need to cite official reports: just look at the free cash flow generated over the last year and the ability to maintain a sustainable dividend even in lower oil price scenarios.

Here's why, in my opinion, Eni shares represent a relatively safe harbour in this time of transition:

• Solid dividend: management has repeatedly reiterated its commitment to maintaining generous shareholder remuneration, including through buyback plans. In a context of uncertain interest rates, having a reliable dividend makes all the difference.
• Attractive valuation: after recent corrections, the price-to-earnings ratio has fallen to levels that have historically represented good entry opportunities.
• Energy diversification: the growth of Plenitude and renewable activities lifts the stock from exclusive exposure to the price of crude, broadening the pool of potential investors.
• Macro scenario: with oil prices holding in a comfortable range (between $70 and $80) and global demand showing no signs of collapsing, cash generation continues.

Banco BPM, Credit Agricole and doValue: Three different stories, one common lesson

Take the case of Banco BPM. Next week, the board will meet to finalise the slate for board renewal, with Credit Agricole wanting to get its hands on as many seats as possible. It's a classic power struggle, which usually leads to uncertainty and a choppy stock performance. Anyone investing in a bank in the midst of such corporate turmoil has to factor in upheavals and potential strategic delays.

Similarly, doValue is affected indirectly: the more banks reorganise, the more non-performing loans are managed differently, and the stock feels the impact. Eni, however, is a bystander to these power games. Its governance is stable, alliances are clear, and the industrial path is mapped out. This difference, in a well-constructed portfolio, can be the difference between an investment that lets you sleep soundly and one that wakes shareholders up every morning with a new rumour.

How to approach Eni shares today

Personally, I believe the current sideways phase of the stock (the kind that disappoints those looking for a sharp move) is precisely the best time to accumulate. There's no need to chase a rally; you need to position yourself when the market is distracted by other things. And right now, the market is very distracted by the banks.

If we look at the volumes in recent days, we see that trading in Eni shares is sustained but not excessive: it means there's interest, but not the frenzy typical of bubbles. To me, that's a sign of structural demand, probably from institutional investors and pension funds seeking returns with a moderate risk profile. The ideal approach for someone looking to get in now is to aim for a medium-to-long-term horizon, perhaps using volatility to average down the entry price a little.

Conclusions: Eni or not Eni?

The answer, for those with one eye on returns and the other on solidity, is yes. Eni shares aren't the stock to triple in a year, but they are the classic steady performer in a well-balanced portfolio: they run without jerks, pay a dividend, and when the wind turns, they manage to hold up better than others. With the banking scuffle underway, having a stock like Eni means sleeping more soundly, knowing your investment is anchored to the real economy and not to power games in boardrooms.

And you, are you keeping an eye on the six-legged dog stock, or do you prefer to stay on the sidelines and watch the banks' game? I've already made my choice: I keep buying Eni every time the price drops below €14. A boring strategy, but one that historically pays off.