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

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

The banking system's background noise and the effect on Eni

In recent weeks, banking sector consolidation has captured attention: Credit Agricole counting seats on the new Banco BPM board, the upcoming board meeting to finalize the list, and the usual whispers of mergers in the background. All this creates volatility, especially on stocks like Banco BPM itself and, to some extent, doValue, which is indirectly affected. But the long-term investor knows that the true thermometer of the Italian market, at least in terms of market capitalization and weight in the real economy, remains energy. And here, Eni is the main barometer.

While banks squabble over board seats (and sometimes overly opaque strategies), Eni continues to generate profits and distribute dividends. The question many are asking is: is this divergence here to stay, or will the energy stock be sucked into the credit sector's vortex? My opinion is that Eni's fundamentals are more solid today than they have ever been, and that the banking sector play, however important, remains a side event for those focused 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 of the past. Today, we're talking about a reality structured across multiple businesses: from classic exploration to green chemistry (Versalis), from renewables (Plenitude) to bio-refining. And the results show. No need to cite official reports: just look at the free cash flow generated in the last year and the ability to maintain a sustainable dividend even in lower oil price scenarios.

This is why, in my view, Eni shares represent a relative safe haven in this transitional period:

• 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 assured dividend makes a difference.
• Attractive valuation: after recent corrections, the price-to-earnings ratio has dropped to levels that have historically represented good entry opportunities.
• Energy diversification: the growth of Plenitude and renewable activities removes the stock from exclusive exposure to crude oil prices, broadening the pool of potential investors.
• Macro scenario: with oil prices holding in a comfort zone (between $70 and $80) and global demand showing no signs of collapsing, cash flow 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 define the list 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 fluctuating stock performance. Anyone investing in a bank amidst such corporate turmoil must factor in jolts and potential strategic delays.

Similarly, doValue is indirectly affected: the more banks reorganize, the more non-performing loans are managed differently, and the stock suffers. Eni, however, is a stranger to these insider games. Its governance is stable, alliances are clear, and its industrial path is set. This difference, in a well-constructed portfolio, can be the difference between an investment that lets you sleep peacefully and one that wakes the shareholder every morning with new speculation.

How to approach Eni shares today

Personally, I believe that the current sideways phase of the stock (the one that makes those seeking quick gains turn up their noses) is precisely the best time to accumulate. There's no need to chase the rally; you need to position yourself when the market is distracted by something else. And right now, the market is very distracted by the banks.

If we look at the volumes in recent days, trading in Eni shares is sustained but without excesses: it means there's interest, but not the frenzy typical of bubbles. For me, it's a sign of structural demand, probably from institutions and pension funds seeking returns with a moderate risk profile. The ideal approach for those wanting to enter now is to aim for a medium-to-long-term horizon, perhaps using volatility to average down the entry price slightly.

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 workhorse in a well-balanced portfolio: it runs without jerks, pays dividends, and when the wind turns, it manages to defend better than others. With the ongoing banking sector turmoil, 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 looking at the six-legged dog stock, or do you prefer to stay on the sidelines watching 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.