Thursday, December 18, 2014

ASK THE READERS - Should I buy BBL, GE, CVX, COP?

 
We tried this out for the first time last month I thought it went well so I am planning to continue with an "Ask the Reader" post every month. 

As we did last month, we have selected four stocks on our current watch list that we have considered buying at this time.  But rather than stress ourselves out trying to decide which one to buy, we have decided to add some fun into our buying process and turn to our fellow bloggers and readers to find out what you think we should buy. 

Please spend a few minutes to vote for one stock from this group that you would consider buying in the upcoming week.  Also, please briefly tell us why you like the stock that you picked. 

Thanks in advance for your contribution!



STOCK #1 (BBL)
  • Sector: Materials - Metals & Mining
  • Market Cap: 93 Billion
  • Dividend Yield: 4.26% 
  • Consecutive years of dividend increase: 11 Years
  • Paying Dividends Since: 1990
  • Payout Ratio: 56%
  • P/E Ratio: 11.6
STOCK #2 (GE)
  • Sector: Industrials - Electrical Equipment
  • Market Cap: 252 Billion
  • Dividend Yield: 3.5% 
  • Consecutive years of dividend increase: 3 Years
  • Paying Dividends Since: 1899 
  • Payout Ratio: 67%
  • P/E Ratio: 19.1
STOCK #3 (CVX)
  • Sector: Energy - Oil & Gas
  • Market Cap: 206 Billion
  • Dividend Yield: 4.10% 
  • Consecutive years of dividend increase: 19 Years
  • Paying Dividends Since: 1912 
  • Payout Ratio: 39%
  • P/E Ratio: 10.0
STOCK #4 (COP)
  • Sector: Energy - Oil & Gas
  • Market Cap: 85.9 Billion
  • Dividend Yield: 4.6% 
  • Consecutive years of dividend increase: 1 Years
  • Paying Dividends Since: 1934
  • Payout Ratio: 38%
  • P/E Ratio: 9.25

**LET US KNOW WHICH STOCK YOU WOULD PICK AND WHY**


31 comments:

  1. I like CVX out of all of those names. BBL is too volatile and I don't even consider GE a dividend growth stock if they cut the dividend when things get though.

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    1. Thanks for your vote...based on the votes thus far, looks like it will likely be between CVX and BBL. AFFJ

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  2. I just bought my first shares of CVX yesterday. This is actually my first stock purchase, aside from a few loyal3 purchases. I am a newbie to the DGI community and I chose CVX because of their low payout ratio, which hopefully will give them a big enough cushion to handle the lower oil prices without cutting into their dividend.

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    1. Ron - I've had my eye on CVX for a while now and saw it go down to almost $100 but didn't pull the trigger. kicking myself right now because as of today, it was back to $112. AFFJ

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  3. If I had to pick I'd go with either CVX or COP right now. Maybe I'd go with COP simply because we already own CVX.

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    1. Tawcan - both are great stocks. We don't own either so if we end up going with CVX or COP, both would be new holdings for us. :) AFFJ

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  4. BBL for biggest long term win if you can handle volatility.

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    1. We currently own BBL so we know what you mean by volatility. But long term, we have to agree that BBL is a great stock to own if you are looking for growth and income. AFFJ

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  5. I recently bought BHP and my intention was to buy Chevron too, but just when I had decided, the share price rose suddenly :(

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    1. We are in the same boat Cazadividendos...bought BBL and had our eye on CVX. We actually had a limit order for $100 but it went down as low as $100.30 so the order was never processed. The stock is now at $112 so we are bummed. AFFJ

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  6. Tally so far is: BBL - 1; COP - 1; CVX - 1...please keep your votes coming. :)

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  7. Though I don't own any energy names yet, my vote if I had to pick one would be CVX. Long history, huge company that is involved in many aspects of oil from discovery to the gas pump and a yield over 4% should be reason enough.

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    1. Thanks for you vote DivHut...I'd be happy if it ends up being CVX. I agree with you, the history and over 4% yield makes CVX an attractive stock. AFFJ

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  8. BBL is my vote. They are very diverse and still a great value.

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    1. We've been buying BBL for about two months now. In fact, it was last months ASK THE READER winner! I still think there is value in BBL so I'd still add to our holding if BBL ends up being this months winner. AFFJ

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  9. If you're a gambling man, go for BBL for the long term. If you're a cautious man, go for CVX but I don't know a good entry point since oil is all over the place.

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    1. It appears you might be a bit torn between the two. :) I'm sensing that I may have to ask readers to pick top two because you're not the only one with two tops picks. Thanks for your input. AFFJ

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  10. I'd say BBL would be my choice, as I feel it is trading at the biggest discount. GE is priced about where I bought it and even that was a small play and I'm waiting for a significant drop to add more.

    CVX isn't a huge value to me at the price that it rose to at the end of the week. I felt there were much better oil deals out there such as BP, which I grabbed a position in near its low. I could only do my best to try and get a fair value calculation on the oil majors, which I wrote about here: http://attractyourdevelopment.com/undervalued-oil-stocks-2014/
    CVX just didn't drop far enough for me to be jumping with excitement over it, not that it's a bad investment.

    As far as COP goes, I wanted to get in under $60 a share but of course that price quickly went away. However, I did initiate a stake in its spin off company Phillips 66 (PSX), which doesn't seem to be getting as much love as COP but may have more upside.

    Anyways, it is worth noting that COP has an excellent direct stock purchase plan through Computer Share, with a minimum investment of only $25 a month and no fees! PSX and XOM both have great plans like this too. So, I guess I would buy BBL and then start my monthly plan in COP and let dollar-cost averaging do the work over the course of this year. That way, I could get two of the four choices and keep my trading costs to a minimum.

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    1. VERY well said Hank! You seem very well in tuned with the current market. I have not looked into direct stock purchase plan investing through Computer Share since we received 100 free trades a year with our broker but will definitely look into it as a way to invest more frequently and in smaller amounts. I'll will also check your the article on undervalued oil stocks.

      Thanks for such a thorough response. AFFJ

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  11. Tally so far is: BBL - 3; CVX - 2; COP - 1...please keep your votes coming. :)

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  12. In my view, in a stricktly numerical point of view, the most attractive is BBL.
    P/B is another ratio I look for.
    The only handicap is the Payout Ratio, I like it a little lower. Maybe there is a risk that the company will flat or reduce de dividend.
    All that said, seems to be the one with a larger safety net, at current prices.

    ps I use a excel speadsheet to look at the data, with data provider MSN money and ratios are a bit different than the ones you present. Why is that?

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    1. Thanks for your vote Trader...I agree that the payout ratio could be a bit lower though.

      As for the data I used, its a combination of Morningstar.com and Dividendinvestor.com. I suppose the accuracy depends on how quickly data is uploaded to the respective websites. I'll look into MSN to see if the data is a more dependable source.

      AFFJ

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  13. I like CVX also, since oil has been beaten down a bit it seem like a good entry point to buy some CVX. They have a long history of paying dividend so my vote would be CVX.

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    1. Thanks for your vote J - CVX is currently one of the top runners along with BBL and for good reason given the recent oil prices. Long term, I like CVX as an investment though. AFFJ

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  14. Tally so far is: BBL - 4; CVX - 3; COP - 1...please keep your votes coming, I will likely make a buy sometime tomorrow. :)

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  15. AFFJ,
    If I am in your shoes I will look at my portfolio first and upon looking you have 12.96% weight on energy, 7.82% on material and only 6.53% on industrial so I would think GE as my first pick but wait... BBL still offers the best value right now so I would still buy BBL.
    Happy holidays to your family!
    FFF

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    1. Looking purely at portfolio weight, GE might be the better move. But since our dividend stocks portfolio is just a slice of our overall investments, we aren't as concerned with a temporary over-weight in a particular sector if what we are buying are at excellent prices. :) AFFJ

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  16. I recently got some shares of CVX, although it looks like it has bounced back a bit already. Energy will be interesting to watch as it should remain volatile in the short-term.

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    1. Yes, we fully except energy prices to remain volatile in the short-term also. Hopefully, that means these sale prices will stick around a little bit longer. :) AFFJ

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  17. BBL, COP, CVX all good value here. If I had to pick one, I'd probably go with COP as I think long term oil price growth should be a net positive and exposure at these price levels should lead to good gains. Iron ore may still have further to bottom out, given large excess supply, but BBL should be well positioned

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    1. I agree, it's a tough choice. Glad I have this awesome community to help me decide using all the great feedback. We went with BBL again this month as the price continued to drop following our purchase last month. AFFJ

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