Oil related companies

[benjamen]

Oil is down into the low $80s and has dragged most of the oil related stocks down with it. I believe this to be temporary and a buying opportunity. However, if you had to buy a single stock to leverage this price dip, which one would it be?

[EricL]

Mine would be either Chevron Corp. (CVX) or Conoco Phillips (COP).

Both have great yields and dividend growth and plenty of projects going on to continue growing production.

[DividendDragon]

EricL

What about XOM?

I bought into XOM at $92.

Global company
Massive free cash flow
Solid dividend history
It's MASSIVE so can surely weather geopolitcal storms?
Ok it's slightly over the peer p/e of 11.7 but surely it's safety is worth the slight premium.

On the pullback

Seems to be screaming buy.

[Kerim]

Hard to argue with any of those (COP, CVX, XOM), really. I've been building a position in XOM at these prices. COP scores better in my system, and like Eric, I really love the higher starting yield. But I already have a lot of COP and wanted to add another name, and XOM is certainly a dividend growth staple. And XOM's current yield is better than it has been in a long time. I don't think either is a bad choice.

Maybe lean toward COP if you want to juice your dividends a bit in the early stages of building your portfolio (if I recall your situation correctly). Or go with XOM if you want to go with the more "core" holding; I agree with you that this feels like a pretty solid entry point.

(I am prohibited from buying CVX because of my job, so I have not taken a close look at it and so cannot speak about how it stacks up next to either COP or XOM.)

[DividendDragon]

Can't argue there Kerim

I just felt that XOM was a more solid, safer core investment.

(10-20-2014, 10:12 AM)Kerim Wrote: Hard to argue with any of those (COP, CVX, XOM), really. I've been building a position in XOM at these prices. COP scores better in my system, and like Eric, I really love the higher starting yield. But I already have a lot of COP and wanted to add another name, and XOM is certainly a dividend growth staple. And XOM's current yield is better than it has been in a long time. I don't think either is a bad choice.

Maybe lean toward COP if you want to juice your dividends a bit in the early stages of building your portfolio (if I recall your situation correctly). Or go with XOM if you want to go with the more "core" holding; I agree with you that this feels like a pretty solid entry point.

(I am prohibited from buying CVX because of my job, so I have not taken a close look at it and so cannot speak about how it stacks up next to either COP or XOM.)

[EricL]

(10-20-2014, 09:54 AM)Lewys120 Wrote: EricL

What about XOM?

I bought into XOM at $92.

Global company
Massive free cash flow
Solid dividend history
It's MASSIVE so can surely weather geopolitcal storms?
Ok it's slightly over the peer p/e of 11.7 but surely it's safety is worth the slight premium.

On the pullback

Seems to be screaming buy.

I don't think you could go wrong with either company, but for a tad higher growth and a significantly higher yield I've gone with CVX in my portfolio.
Info from FAST Graphs.

CVX:
Current Yield - 3.8%
10YR EPS Growth - 8.9%
10YR Dividend Growth - 10.6%
Estimate Earnings Growth - 6.1%

XOM:
Current Yield - 3.0%
10YR EPS Growth - 8.4%
10YR Dividend Growth - 9.7%
Estimate Earnings Growth - 5.8%

Certainly nothing wrong with XOM and with a AAA credit rating, its as financially strong as you can get.

[DividendDragon]

Fair. I just wanted to be super safe as I'm drastically lacking in core holdings (I'm a new investor)

I've enjoyed reading your SA articles

[EricL]

Here is a post I had in a thread on Seeking Alpha regarding XOM and CVX.

Using FAST Graphs here are the numbers I get since the beginning of 2003.

XOM:
$10,000 investment turned into $32,255 (10.4% annualized) without reinvestment of dividends and $34,984 (11.2% annualized) with reinvestment of dividends

CVX:
$10,000 investment turned into $43,854 (13.3% annualized) without reinvestment of dividends and $50,695 (14.7% annualized) with reinvestment of dividends.

The higher yield of CVX really makes a big difference over the years.

[alexg]

I have to ask, what's wrong with buying both? Unless, your heavily overweight in the oil sector, it shouldn't be an issue.

[Main Street Stock Investor]

Benjamin,
Do you currently hold stock positions in the energy sector? What is your target % allocation for energy sector stocks in your portfolio? CVX, XOM, and COP are all excellent choices to hold as core positions in the energy sector of a portfolio. I'm going from memory, but I believe all 3 stocks are Dividend Achievers. Other post correctly point out that there are differences in current stats, however, overall performance of these 3 stocks will be variable with time. diversification helps eliminate single company risk (as in BP Macando, and Exxon Valdez). I would suggest that you set your target to own either 2 or 3 energy stocks based on your research, and build positions in those stocks in a methodical way by purchasing partial positions and knowing what you want for a final position.

From a portfolio management perspective, I stay diversified across all 10 GICS sectors. In most cases I hold at least 3 Dividend Achievers or Dividend Aristocrats in each sector, Telecom being the exception (only T is a dividend achiever).
M$$I

[benjamen]

(10-25-2014, 09:58 AM)Main Street Stock Investor Wrote: Benjamin,
Do you currently hold stock positions in the energy sector? What is your target % allocation for energy sector stocks in your portfolio? CVX, XOM, and COP are all excellent choices to hold as core positions in the energy sector of a portfolio. I'm going from memory, but I believe all 3 stocks are Dividend Achievers. Other post correctly point out that there are differences in current stats, however, overall performance of these 3 stocks will be variable with time. diversification helps eliminate single company risk (as in BP Macando, and Exxon Valdez). I would suggest that you set your target to own either 2 or 3 energy stocks based on your research, and build positions in those stocks in a methodical way by purchasing partial positions and knowing what you want for a final position.

From a portfolio management perspective, I stay diversified across all 10 GICS sectors. In most cases I hold at least 3 Dividend Achievers or Dividend Aristocrats in each sector, Telecom being the exception (only T is a dividend achiever).
M$$I

I am newer to dividend investing, so I am a long way off from a large, diversified portfolio. Since I am already over weight in the oil sector, I decided to continue the diversification of my portfolio this month.

[Be Here Now]

The opportunity has passed, but if you were on your toes you could have bought KMR at 82, but it has rebounded to 95. Or you could have bought KMI at 34, but it has rebounded to 39. Those bargain prices were on offer the same day the VIX hit 31.