Adams Natural Resources Fund Announces 2024 Performance

Rhea-AI Summary

Adams Natural Resources Fund (NYSE: PEO) reported its 2024 investment performance with a 5.3% total return on net asset value, outperforming its benchmark's 4.6% return. The Fund's market price achieved a 13.8% total return.

The Fund distributed $1.77 per share in income dividends and capital gains, representing a 6.7% annual distribution rate. Net assets reached $636,334,398 by year-end 2024, with a net asset value per share of $24.21.

The portfolio maintains significant exposure to energy sector leaders, with Exxon Mobil (24.2%) and Chevron (11.6%) as top holdings. Industry weightings show a strong focus on Integrated Oil & Gas (35.8%) and Exploration & Production (20.7%), followed by Materials sectors.

Positive

• Outperformed benchmark return (5.3% vs 4.6%)
• Strong market price return of 13.8%
• Healthy distribution rate of 6.7%
• Solid 3-year and 5-year performance metrics (16.1% and 12.5% respectively)

Negative

• Net asset value per share decreased from $24.83 to $24.21 year-over-year
• Underperformed S&P 500 Energy Sector's 3-year return (16.1% vs 20.0%)

Insights

Financial Analyst

The Adams Natural Resources Fund's 2024 performance reveals several notable insights. The fund's 5.3% NAV return outperformed its benchmark by 70 basis points, while delivering an impressive 13.8% market price return. The significant disparity between NAV and market price returns indicates a substantial reduction in the fund's discount to NAV during 2024.

The fund's 6.7% distribution rate stands out in the current market environment, supported by $1.77 per share in distributions. The portfolio maintains a concentrated position in energy majors, with 65.3% of assets in the top 10 holdings. This concentration, particularly the 24.2% position in Exxon Mobil, suggests a conservative approach focused on large-cap, dividend-paying energy companies.

The fund's three-year annualized return of 16.1% demonstrates strong medium-term performance, though it lags the S&P 500 Energy Sector's 20.0%. This underperformance is partly offset by the fund's materials sector exposure, which has acted as a diversification buffer in a volatile energy market.

Market Research Analyst

The portfolio's sector allocation tells a compelling story about positioning for 2024's market conditions. The dominant 35.8% weighting in integrated oil & gas companies, combined with 20.7% in exploration & production, shows a strategic focus on upstream operations that benefit from stable oil prices. The 13.0% allocation to chemicals provides important diversification from pure energy exposure.

The fund's market price outperformance suggests growing investor confidence in natural resources, particularly in high-quality, dividend-paying companies. The increase in shares outstanding from 25.5M to 26.3M indicates demand for the fund's shares, while the slight decline in NAV per share from $24.83 to $24.21 reflects distribution payments rather than poor performance.

BALTIMORE, Jan. 16, 2025 (GLOBE NEWSWIRE) -- Adams Natural Resources Fund, Inc. (NYSE: PEO) announces the Fund’s investment returns for 2024. The total return on the Fund’s net asset value for 2024 was 5.3%, with dividends and capital gains reinvested. The comparable figures for the S&P 500 Energy Sector and the S&P 500 Materials Sector were 5.7% and 0.0%, respectively.  Our benchmark, which is comprised of the S&P 500 Energy Sector (80%) and the S&P 500 Materials Sector (20%), returned 4.6%. The total return on the Fund’s market price for the same period was 13.8%.

The Fund paid $1.77 per share in income dividends and realized capital gain distributions to shareholders in 2024, producing an annual distribution rate of 6.7% of net asset value.

“The Energy market presented challenges in 2024. Our disciplined approach supported good stock selection that enabled the Fund to outperform its benchmark,” said Jim Haynie, CEO of Adams Funds. 

The 2024 Annual Report is expected to be released on or about February 19, 2025.

ANNUALIZED ONE, THREE, FIVE, AND TEN-YEAR COMPARATIVE RETURNS (12/31/24)
	1 Year	3 Year	5 Year	10 Year
Adams Natural Resources Fund (NAV)	5.3%	16.1%	12.5%	5.5%
Adams Natural Resources Fund (market price)	13.8%	17.8%	13.0%	5.8%
S&P 500 Energy Sector	5.7%	20.0%	12.1%	4.9%
S&P 500 Materials Sector	0.0%	-0.4%	8.7%	7.9%

NET ASSET VALUE ANNOUNCED

The Fund’s net asset value at the end of 2024, compared with the year earlier, was:

	12/31/24	12/31/23
Net assets	$636,334,398	$633,446,941
Shares outstanding	26,284,550	25,514,441
Net asset value per share	$24.21	$24.83

TEN LARGEST EQUITY PORTFOLIO HOLDINGS (12/31/24)
	% of Net Assets
Exxon Mobil Corporation	24.2%
Chevron Corporation	11.6%
ConocoPhillips	6.4%
Linde plc	4.6%
EOG Resources, Inc.	4.2%
Williams Companies, Inc..	3.1%
ONEOK, Inc.	3.0%
Hess Corporation	2.9%
Baker Hughes Company	2.8%
Phillips 66	2.5%
Total	65.3%

INDUSTRY WEIGHTINGS (12/31/24)
	% of Net Assets
Energy
Integrated Oil & Gas	35.8%
Exploration & Production	20.7%
Storage & Transportation	10.3%
Refining & Marketing	6.4%
Equipment & Services	6.3%
Energy Related	0.5%
Materials
Chemicals	13.0%
Metals & Mining	3.1%
Containers & Packaging	1.9%
Construction Materials	1.5%

About Adams Funds

Since 1929, Adams Funds has consistently helped generations of investors reach their investment goals. Adams Funds is comprised of two closed-end funds, Adams Diversified Equity Fund, Inc. (NYSE: ADX) and Adams Natural Resources Fund, Inc. (NYSE: PEO). The Funds are actively managed by an experienced team with a disciplined approach and have paid dividends for more than 90 years across many market cycles. The Funds are committed to paying a minimum annual distribution rate of 8% of NAV paid evenly each quarter throughout the year, providing reliability for long-term shareholders. A portion of any distribution may be treated as paid from sources other than net income, including but not limited to short-term capital gain, long-term capital gain, and return of capital. The final determination of the source of all distributions for tax reporting purposes in a calendar year, including the percentage of qualified dividend income, will be made after year-end. Shares can be purchased through our transfer agent or through a broker. For more information about Adams Funds, please visit: adamsfunds.com.

For further information please contact: adamsfunds.com/about/contact │800.638.2479 

FAQ

What was PEO's total return on NAV for 2024?

Adams Natural Resources Fund (PEO) achieved a 5.3% total return on net asset value for 2024.

How much did PEO distribute to shareholders in 2024?

PEO distributed $1.77 per share in income dividends and realized capital gains in 2024, representing a 6.7% annual distribution rate.

What are PEO's largest portfolio holdings as of December 31, 2024?

PEO's largest holdings were Exxon Mobil (24.2%), Chevron (11.6%), and ConocoPhillips (6.4%).

How did PEO's market price performance compare to its NAV in 2024?

PEO's market price return was 13.8% in 2024, significantly higher than its NAV return of 5.3%.

What is PEO's 5-year annualized return as of December 31, 2024?

PEO's 5-year annualized return on NAV was 12.5% as of December 31, 2024.