Saturday, June 1, 2013

Recent Buy

To close out May, I decided to go on and purchase some shares of Chevron.  I've been eyeing shares for a while now and finally pulled the trigger.  I think I was early on the purchase because there's still about 2.5 more months until the next ex-dividend date which should come around the middle of August but I chose to go on and make the purchase.  And of course right after my limit order triggered, the markets decided to sell off pretty hard to end the day and I could have picked up the shares for about 1% cheaper.  In the long run though that 1% won't make that big of a difference, especially since I plan on averaging down my cost basis should Chevron's share price continue to sell off.

As I said, this was a small position as I only purchase 15 shares of Chevron for $124.20 each.  I try to make my purchases at least $2,000 to try and limit transaction costs and will go with a larger stake whenever I pick up more shares.  After commission, my cost basis was $1,870.95 or $124.73 per share.  Based on the current annual dividend of $4.00 per share, I can expect to receive $60 in annual dividends before further increases or reinvestment.  These shares will carry a YOC of 3.21%.

This purchase brings my FI portfolio's YOC to 2.97% with a YOP of 3.09%.

I've updated my Portfolio page to reflect the purchase.

10 comments:

  1. Nice purchase. I have Chevron on my watch list but it is a pricey stock and with my low funds I'm not in a position to buy yet. But I will own it one day. It's the only place I go to get my gas.

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    1. Gareth,

      I agree that Chevron isn't exactly at the best valuation right now but I wanted to go on and start my position. I've missed out on it several times already and wanted to get a start on my position. I'll be looking forward to it pulling back further so I can average down my cost basis. In the meantime, thanks for being a loyal customer.

      Thanks for stopping by!

      Delete
  2. Pursuit,

    Nice buy! I've got CVX and XOM on my watch list right now. Both are great companies with long standing track records of huge profitability and returning a lot of cash to shareholders via buybacks and dividends. Great stuff!

    Best wishes.

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    Replies
    1. DM,

      I think XOM is at a better valuation currently but the starting yield just isn't there. It's one of those where I'll probably just have to bite the bullet and make the purchase of XOM even though the yield isn't as high as I'd like.

      Thanks for stopping by!

      Delete
  3. We're on the same wavelength. I just picked up some CVX for $125 (I still need to write up my buy). I'm eying O for next month if it keeps dropping like it is.

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    Replies
    1. MyFIJ,

      I recently sold a put on O and would want the price to come down to around the $42-43 before I'd start buying. CVX is a great company and while I don't think either of our purchase prices are the best, I also don't think it'll matter that much when the holding period is 20+ years. It'll just give us a chance to average down our cost basis which I'm always a fan of.

      Thanks for stopping by!

      Delete
  4. Nice purchase -- I would like to own more CVX myself. :)

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    Replies
    1. DGM,

      I'd still like to own some more CVX but the next purchase won't come unless we get back below $120 at the minimum, probably closer to $116. Although the action to end the month yesterday might bring those levels sooner than later.

      Thanks for stopping by!

      Delete
  5. Pursuing Financial FreedomJune 2, 2013 at 7:35 PM

    Great Buy! According to my calculations, as well as David Fishs CCC list, CVX is trading below its Grahm number. It has a PE ratio under 10, with very nice 30 +years of dividend increases and solid dividend growth. This is one of the few stocks that are undervalued in my opinion. I would feel comfortable buying CVX up to $130, with it's EPS performance and yield. Also, XOM is fairly valued, as you mentioned. Good time to grab both with confidence.

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    Replies
    1. Pursuing Financial Freedom,

      I believe CVX will continue to be a consistent winner for years and decades to come. I don't see America or the world's addiction to oil ending anytime soon. I'm a little more bullish on XOM than CVX because I think natural gas will begin to replace more of our energy needs and XOM is in a great position to capitalize on that. I've just never purchased any XOM because the starting yield is much lower than some of the other majors, heck it's about 0.50% lower than CVX's currently and CVX typically grows the dividend at a higher rate while XOM spends much more on buybacks. I don't think an investor will look back in 10 years wishing that hadn't bought either company, probably just wishing they had bought more.

      Thanks for stopping by!

      Delete