Chasing the Yield – September 27, 2021
Episode 22
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Company Focus – Albemarle (ALB)
I got very lucky with Albemarle. When I purchased this stock it was part of a group of 50 stocks for my IRA. I chose these stocks because they were relatively safe companies to invest in and their financials were solid enough to not worry about any cuts in dividends. I was very new to dividend income investing and safety was my main concern. The stock price rise over the last two years is impressive. I lucked out with my timing by purchasing at $59.06/share. The price at close on September 24, 2021 is $226.40 giving me a whopping 296.4% return. The dividend yield is rather anemic, however, at only 0.68%. I’m at the point where I’m considering taking the profit and putting that money into stocks with higher yields.
Below is the chart from the day I purchased my holdings to present.
Almbermarle (ALB) from August 28, 2019 to present
Albemarle’s P/E is 37.15 and seems crazy overvalued. This is why I’m considering cutting my holdings of this company. Along with the tiny dividend yield their dividend growth is also just average at about 6% over the last 5 years.
I think this is a safe company in which to invest. I’m not sure if I would buy at this point with their stock price at such highs. The risk is buying at the peak and suffering solid losses should the stock market go through a correction. If the price remains stable it’s a solid company to hold because at the very least you should do better than a savings or a money market account. But, if you’re really concerned about maintaining principle and minimizing risk you might be better off with purchasing a 24 month CD.
Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. It operates through three segments: Lithium, Bromine Specialties, and Catalysts. The Lithium segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and lithium specialties; and reagents, such as butyllithium and lithium aluminum hydride for use in lithium batteries for consumer electronics and electric vehicles, high performance greases, thermoplastic elastomers for car tires, rubber soles, plastic bottles, catalysts for chemical reactions, organic synthesis processes in the areas of steroid chemistry and vitamins, life sciences, pharmaceutical industry, and other markets. It also provides cesium products for the chemical and pharmaceutical industries; zirconium, barium, and titanium products for pyrotechnical applications; technical services for the handling and use of reactive lithium products; and lithium...
