Just wondering if cuts will be coming if the price of crude continues to decline. If it happens would you sell or hold? I currently invest in Chevron, Exxon Mobile, Conoco Phillips, And Bp. I hope they are big enough to endure and continue to sustain and increase their dividends.
I'd urge you to look at payout ratios of companies and their dividend streaks individually.
Personally, I'm relatively comfortable that XOM won't cut their dividend (my only oil stock out of a small portfolio) With a 33% payout ratio and a 30ish year streak.. I'm confident.
If they cut their dividend, I'd be inclined to sell.
I have near zero concern about CVX or XOM cutting their dividends. Conoco Phillips a slight bit less sure and BP the least sure about, although I think both are safe unless this price crash gets dragged out for an extended 12+ month time frame.
I agree that Conoco and BP are probably the ones to monitor closer.
I guess we have been down this road before and I expect the outcome to be similar. Probably a great buying opportunity.
(12-08-2014, 07:11 PM)Jason Wrote: [ -> ]I guess we have been down this road before and I expect the outcome to be similar. Probably a great buying opportunity.
This. Of course nobody can predict commodity prices with confidence, especially in the short term, but it would not surprise me if oil prices did not rebound quickly, or if they even continue to decline. I am rooting for this -- would love to bulk up my energy holdings at sale prices. I want some XOM shares in the $80s!
I am thinking oil will get down into the mid-50's, perhaps as low as 50, and then gradually recover. I am holding and reinvesting dividends in CVX, KMI and SE, all of which have experienced some recent pain.
I think it is going to be a tremendous buying opportunity. For me, it is still too early, though, for any add-on purchases.
Chevron down to $103.70 and a 4.1% yield this morning.
Looks like oil may not be done with its decline. Could be some great opportunities for long term investments in the majors if the crude slide continues down to the $40's or $50's.
(12-09-2014, 05:56 PM)Kerim Wrote: [ -> ]I want some XOM shares in the $80s!
I guess I didn't have to wait too long! Time to put my money where my mouth is...
UPDATE: Did it. Just bought some XOM at $88.36 and some COP at $63.12. If they keep dropping, I'll buy more.
As a new investor my portfolio is small and as a consequence of me still building oil is currently 12% of my portfolio. I've made the decision to overweigh now as I just can't pass up the opportunity. I will execute a buy for COP in the coming week.
Lewys
I was already quite exposed to Oil&Gas so I took a bit of a beating and sadly I won't have capital in hand to increase positions. Anyway, I am quite confident on the dividend prospects of most of my investments with exposure. In order:
Very confident that the dividend won't be cut
- Exxon (XOM)
- Chevron (CVX)
- Bank of Nova Scotia (BNS) (Has Significant exposure to many oil exporting countries)
Confident
- Amec Foster Wheeler (AMFW)
Concerned
- Chicago Bridge and Iron (CBI)
Chicago Bridge has a fairly tight balance sheet, if commodity prices stay low for a long period of time and most companies start to cut on capes, CBI might have some trouble.