Income investors must always have the discipline to follow our rules as we invest for income. I know that every expert is suggesting that oil is a weak play but we need to look for dividend machines. Remember, a dividend machine is a company that pays us at least 3 percent. Although recent cost of living increases suggest that some day soon we will be able to buy a 3 percent C.D., today any income greater than three percent is a good deal.
Conoco Philips, symbol COP pays a dividend of 3.7 percent based on the closing price of $71.43 on Friday. This is the best yield in the industry and COP qualifies as a dividend machine. If you own the stock by May 19, 2011 you will receive $.66 per share on June 1, 2011. Do you know that in 2006 the dividend was $.33? Nice income gain. I am hoping for a similar performance over the next 5 years.
COP is a strong company with only a .33 D/E ratio and it earns a whopping $8.30 per share per year. Consider this for the income producing part of your portfolio especially if your oil patch is weak.
Very Truly Yours,
TheMoneyMadam
