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Oil related companies
#1
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?
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#2
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.
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#3
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.
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#4
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.)
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#5
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.)
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#6
(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.
My website: DGI For The DIY
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#7
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 Smile
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#8
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.
My website: DGI For The DIY
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#9
I have to ask, what's wrong with buying both? Unless, your heavily overweight in the oil sector, it shouldn't be an issue.
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#10
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
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