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

If you've been keeping an eye on Eni shares over the past few weeks while also watching movements in the banking world, you might have noticed a curious trend: 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. That's no coincidence, and today I want to explain why.

The banking sector noise and its effect on Eni

In recent weeks, banking sector jostling has grabbed the spotlight: Credit Agricole counting seats on Banco BPM's new board, the upcoming board meeting to finalise the list, and the usual whispers of mergers in the background. All of this creates volatility, especially for stocks like Banco BPM itself and, to some extent, 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 gauge.

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: will this divergence last, or will the energy stock get sucked into the credit sector's vortex? In my view, Eni's fundamentals are stronger today than they've ever been, and the banking battle, while 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 it once was. Today, it's a diversified entity spanning multiple businesses: from traditional exploration to green chemistry (Versalis), from renewables (Plenitude) to bio-refining. And the results show it. You don't need official reports: just look at the free cash flow generated over the past year and its ability to maintain a sustainable dividend even in lower oil price scenarios.

Here's why, in my opinion, Eni shares represent a relative safe haven during this period of transition:

• Solid dividend: management has repeatedly reaffirmed its commitment to maintaining generous shareholder returns, including through buyback plans. In a context of uncertain interest rates, having a reliable dividend makes a difference.
• Attractive valuation: after recent corrections, the price-to-earnings ratio has dropped to levels that have historically presented good entry points.
• Energy diversification: the growth of Plenitude and renewable activities reduces the stock's exclusive exposure to crude oil prices, broadening its appeal to potential investors.
• Macro scenario: with oil prices holding in a comfortable range (between US$70 and US$80) and global demand showing no signs of collapsing, cash flow remains strong.

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 list for board renewal, with Credit Agricole aiming to secure as many seats as possible. It's a classic power struggle, which typically leads to uncertainty and a volatile stock performance. Anyone investing in a bank amid such corporate turmoil has to factor in upheaval and potential strategic delays.

Similarly, doValue is affected indirectly: as banks reorganise, non-performing loans are managed differently, and the stock feels the impact. Eni, however, remains detached from these behind-the-scenes games. Its governance is stable, its alliances are clear, and its industrial path is set. In a well-constructed portfolio, this difference can be the key to a stress-free investment versus one that keeps shareholders on edge with daily speculation.

How to approach Eni shares today

Personally, I believe the current sideways movement of the stock (the kind that disappoints those chasing quick gains) is actually the best time to accumulate. There's no need to chase a rally; the key is to position yourself when the market is distracted by other things. Right now, the market is very distracted by the banks.

Looking at trading volumes over the past few days, Eni trades are solid but not excessive: it signals interest, but not the frenzy typical of bubbles. To me, that points to structural demand, likely from institutional investors and pension funds seeking returns with a moderate risk profile. For those looking to enter now, the ideal approach is to focus on a medium-to-long-term horizon, perhaps using volatility to average down the entry price.

Conclusion: Eni or not Eni?

The answer, for those balancing yield with solidity, is yes. Eni shares aren't the stock that will triple in a year, but they're the classic steady performer in a well-balanced portfolio: they run smoothly, pay dividends, and when the tide turns, they hold up better than most. With the ongoing banking scuffle, holding a stock like Eni means sleeping easier, knowing your investment is tied to the real economy, not power plays in boardrooms.

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