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 watching the movements in the banking world, you might have noticed a curious phenomenon: while Piazza Affari is being shaken up 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's background noise and its effect on Eni

In recent weeks, the banking M&A scene has captured everyone's attention: Credit Agricole counting its 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 this creates volatility, especially for stocks like Banco BPM itself and, in some ways, doValue, which moves in sympathy. But the long-term investor knows that the true thermometer of the Italian market, at least in terms of market cap 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 keeps churning out profits and paying dividends. The question many are asking is: is this divergence here to stay, or will the energy stock get sucked into the credit sector's vortex? In my view, Eni's fundamentals are now stronger than they've ever been, and the banking saga, 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've followed the stock for years know that Eni is no longer just the oil company it once was. Today, we're talking about a business structured across multiple segments: from traditional exploration to green chemistry (Versalis), from renewables (Plenitude) to bio-refining. And the results show it. You don't need to cite 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 in this transition period:

• Solid dividend: Management has repeatedly reaffirmed its commitment to maintaining generous shareholder remuneration, including through buyback plans. In a context of uncertain interest rates, having a secure dividend makes a difference.
• Attractive valuation: After recent corrections, the price-to-earnings ratio has fallen to levels that have historically represented good entry points.
• Energy diversification: The growth of Plenitude and renewable activities reduces the stock's exclusive exposure to crude oil prices, broadening its potential investor base.
• Macro scenario: With oil prices holding in a comfortable range (between USD 70 and 80) and global demand showing no signs of collapsing, cash flow keeps coming in.

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 grab 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 amidst corporate infighting has to factor in turbulence and potential strategic delays.

Similarly, doValue moves in sympathy: the more banks reorganise, the more non-performing loans are managed differently, and the stock feels the impact. Eni, however, is a stranger to these internal power plays. Its governance is stable, its alliances are clear, and its industrial path is well-defined. In a well-constructed portfolio, this difference can be the deciding factor between an investment that lets you sleep soundly and one that wakes you up every morning with a new piece of speculation.

How to approach Eni shares today

Personally, I believe the current sideways phase for the stock (the kind that makes those chasing quick gains turn up their noses) 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 trading volumes over the last few days, we see that trading in Eni is sustained but without excesses: that means there's interest, but not the frenzy typical of bubbles. To me, that signals 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 an eye on both returns and solidity, is yes. Eni shares aren't the stock that will triple in a year, but they are the classic workhorse in a well-balanced portfolio: it runs smoothly, pays a dividend, and when the wind turns, it holds up better than others. With the ongoing banking brawl, holding a stock like Eni means sleeping more soundly, knowing your investment is anchored to the real economy, not power games in boardrooms.

And you? Are you looking at 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 whenever the price dips below EUR 14. A boring strategy, but one that historically pays off.