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Old 10-17-2014, 08:50 PM   #21
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Some types of drilling are more safe than others
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Old 10-18-2014, 01:21 AM   #22
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Yes, the smart thing would be to put into an ETF or mutual, but I am hellbent on buying a stock since my last little play in Intel scored big for me.

Why not just go with a MLP that yields 2-3x what you are getting or a MLP CEF? They have all been beat the heck down over the last month or so.
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Old 10-18-2014, 06:46 PM   #23
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RDS/B
Value Line Safety Rating: 1
Value Line Timeliness Rating: 2
Value Line Financial Strength Rating: A++
Morningstar Discount to Fair Value: 3%
Dividend Yield: 5.10%

CVX
Value Line Safety Rating: 1
Value Line Timeliness Rating: 2
Value Line Financial Strength Rating: A++
Morningstar Discount to Fair Value: 15%
Dividend Yield: 3.70%

XOM
Value Line Safety Rating: 1
Value Line Timeliness Rating: 3
Value Line Financial Strength Rating: A++
Morningstar Discount to Fair Value: 16%
Dividend Yield: 2.89%

T
Value Line Safety Rating: 1
Value Line Timeliness Rating: 3
Value Line Financial Strength Rating: A++
Morningstar Discount to Fair Value: 0%
Dividend Yield: 5.40%

VZ
Value Line Safety Rating: 1
Value Line Timeliness Rating: 1
Value Line Financial Strength Rating: A++
Morningstar Premium to Fair Value: 7%
Dividend Yield: 4.45%

All five are rated as A++ for financial strength by Value Line; their highest rating. Few companies get this ratings, currently there are 85 companies that Value Line rates with an A++ for financial strength.

Three of the five, the three oil companies, are all currently priced at a discount to Morningstar's fair value for them. The telecom companies are currently priced at, or above, Morningstar's fair value.

Personally, I like to invest in companies that have strength financials, are considered safe, have strong and growing dividend, and when I buy, I like to buy at a significant discount to fair value. While they all have very appealing dividend yields, none of these companies are priced low enough for me to establish a position today, but that's just me. You need to make your own decisions.
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Old 10-19-2014, 10:21 AM   #24
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I'd suggest the vanguard high div yield ETF. The yield is almost 3 percent and you will find Exxon,chevron and other high quality names in the portfolio without the single stock risk. If you want to stick to energy, the vanguard energy Etf is on Morningstar's short list of recommended ETFs.


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Old 10-19-2014, 06:56 PM   #25
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I'd suggest the vanguard high div yield ETF. The yield is almost 3 percent and you will find Exxon,chevron and other high quality names in the portfolio without the single stock risk. If you want to stick to energy, the vanguard energy Etf is on Morningstar's short list of recommended ETFs.


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Very reasonable, sound suggestions
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Old 10-20-2014, 12:54 PM   #26
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I've bought and sold many of the big named oil/gas stocks many times over the years. (more for short term appreciation than for their dividends) However, as I'm sure you are aware, they do come with some unique industry risks so I've always spread my bets. Lot's of high risks activities in the oil industry, not the least of which is the boiling of oil.
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Old 10-27-2014, 05:17 PM   #27
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A follow up. I am committing only 10k to this "fun money". So to humor myself I split it up into two 5k purchases. I bought the first chunk in Suncor. Has a 3% plus dividend and low payout ratio. Cost per barrel produced is mid 30s. Hopefully oil will drop some more so I can buy the other 5k. If nothing else, I was a winner for a day anyways as it jumped 50 cents from the low I bought it on today.


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Old 11-28-2014, 10:21 PM   #28
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A follow up. I am committing only 10k to this "fun money". So to humor myself I split it up into two 5k purchases. I bought the first chunk in Suncor. Has a 3% plus dividend and low payout ratio. Cost per barrel produced is mid 30s. Hopefully oil will drop some more so I can buy the other 5k. If nothing else, I was a winner for a day anyways as it jumped 50 cents from the low I bought it on today.


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Many oil stocks sure took it on the chin today. Some were even kicked while they were down. I'm wondering if it's time to use some of my fun/gambling money in this sector again....
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Old 11-29-2014, 09:34 AM   #29
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Many oil stocks sure took it on the chin today. Some were even kicked while they were down. I'm wondering if it's time to use some of my fun/gambling money in this sector again....

I'm still sitting on my other half. I bought Suncor a few weeks ago in the 32's and it jumped over 35 and now back in 31 range, dropping almost 10% this week. If it will drop 10% more, I will just dump my other half on it. They can extract a lot of oil without having to ramp up exploration costs to get it as they are already sitting on decades of that tar sand.


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Old 12-06-2014, 08:22 AM   #30
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Well, I did acquire some big oil stocks earlier this week and I may buy some more before the end of the year.
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Old 12-06-2014, 08:35 AM   #31
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They say oil is going to $50 a barrel. The same people who said gold was going to tank and it did. I tend to believe them.

Exxon said they were ok with $40 oil but other companies? Not sure...
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Old 12-06-2014, 08:47 AM   #32
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They say oil is going to $50 a barrel. The same people who said gold was going to tank and it did. I tend to believe them.

Exxon said they were ok with $40 oil but other companies? Not sure...
I saw that interview (on CNBC I think) I don't mind holding oil stocks for a while, if needed.
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Old 12-06-2014, 09:17 AM   #33
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They say oil is going to $50 a barrel. The same people who said gold was going to tank and it did. I tend to believe them.

Exxon said they were ok with $40 oil but other companies? Not sure...
Note that the dividends were safe when oil was at this price in 2009 for the supermajors. They have the advantage of having kept the downstream operations, which do well in an environment of low crude prices. Before the dividends are cut expect the buybacks to cease also.
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Old 12-06-2014, 10:21 AM   #34
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They say oil is going to $50 a barrel. The same people who said gold was going to tank and it did. I tend to believe them.

Exxon said they were ok with $40 oil but other companies? Not sure...

Mr. Market just isn't going to ever allow Exxon to go on sale. Oil down 40% from peak and XOM down 10%. I know they are a big gas play now too, but still I was hoping for a chance to buy low that isn't going to happen at least for a while.


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Old 12-06-2014, 10:37 AM   #35
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They say oil is going to $50 a barrel. The same people who said gold was going to tank and it did. I tend to believe them.

Exxon said they were ok with $40 oil but other companies? Not sure...
Chevron also said they're good down to $40 so I think they are both still worthy of holding and if the prices continue to fall then i'll be buying more soon.
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Old 12-06-2014, 11:02 AM   #36
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The oil services industry is the one that has really taken a hit. King Hal plus all of the deep water drillers (Seadrill, with the newest drillships has gone from $30 to $12).

The market expects oil to drop a lot more or stay low for awhile. I was looking at HAL but feel there is no rush.
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Old 12-06-2014, 01:17 PM   #37
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The oil services industry is the one that has really taken a hit. King Hal plus all of the deep water drillers (Seadrill, with the newest drillships has gone from $30 to $12).

The market expects oil to drop a lot more or stay low for awhile. I was looking at HAL but feel there is no rush.
Transocean (RIG) was under $20 recently. That makes the yeild over 10%. Expect dividend cuts from services companies.
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Old 12-06-2014, 02:03 PM   #38
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There is another fallout to the oil price drop - stress is starting to show up in high yield bond funds and bank loan funds. A lot of low quality debt was issued to help fund all that recent furious "new" US oil extraction, and bond fund managers are starting to dump that paper.

I'm a little concerned this might have wider repercussions in credit markets in general. Might be a faint echo of 2007/8. No where on the same scale, but the same class of event.

Of the things I see on the horizon for financial markets, this is the most disconcerting. Otherwise the economy and employment continue to improve while inflation remains extremely tame.
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Are Big Oil dividends safe with lower priced oil?
Old 12-07-2014, 11:27 AM   #39
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Are Big Oil dividends safe with lower priced oil?

All the players in this are just posturing and trying to throw their weight around. In time, the weak will be eaten, the strong who are left will realize collusion is in their best interest, not a price war, and prices will go to a place that provides a nice profit for the survivors by restricting supply.

Opec may look much different, or even break up. But collusion will be the best strategy for all.

The losers will be all those blue collars that jumped into the drilling and pipeline business the last few years (and spent their six figures). The industry will evaporate at the new equilibrium.



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Old 12-07-2014, 01:22 PM   #40
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Transocean (RIG) was under $20 recently. That makes the yeild over 10%. Expect dividend cuts from services companies.
Yep. Seadrill went from a 20% dividend ($4 per year at $20 share price) to recently saying they are eliminating the dividend. The price dropped to $12 per share (which at the previous $4 dividend would be a ridiculous 33% dividend payout.

If oil goes right back up these companies are going to be a steal. Seadrill would bring back the dividend fairly promptly if we were to get $90 oil.

On the flipside, more than a few of the service companies could go bankrupt at $40 oil for an extended period.
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