The DIY Investing Podcast

70 - Oil Majors Clearance Sale 2020


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Mental Models discussed in this podcast:
  • Dividend Aristocrats
  • Dividend Growth Investing
  • Discount Rates
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Show Outline

The full show notes for this episode are available at https://www.diyinvesting.org/Episode70

Current Clearance Sale on Oil Major Stocks
  • As of recording on March 20th, the oil majors trade with the following dividend yields:
    • ExxonMobil $33 per share, $3.48 dividend, 10.5% yield
      • Dividend Aristocrat = 37 consecutive years of dividend increases
      • Uninterrupted dividends since 1882
    • Chevron $58 per share, $5.16 dividend, 8.9% yield
      • Dividend Aristocrat = 32 consecutive years of dividend increases
      • Uninterrupted dividends since 1912
    • Royal Dutch Shell $24 per share, $3.76 dividend, 15.6% yield
    • BP $18 per share, $2.52 dividend, 14% yield
    • TOTAL $27 per share, $2.93 dividend, 10.8% yield
Summary:

During stock market crashes correlations tend to go to 1 and many stocks trade together, both the good and the bad. Market dislocations like this, therefore, offer many opportunities to buy individual stocks at great prices. Today offers that opportunity in the oil supermajors. You have the ability to buy companies at double-digit dividend yields that have raised their dividend every year for over 30 years. This is a once in a 50-year occurrence in the oil industry.

Other References:
  • Episode 12 of the DIY Investing Podcast on Oil Majors
  • 2015 Oil Stock Clearance Article
  • Joshua Kennon's review of investing in oil majors
...more
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The DIY Investing PodcastBy Trey Henninger

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