Showing posts with label Conoco Phillips. Show all posts
Showing posts with label Conoco Phillips. Show all posts

Thursday, August 16, 2018

Conoco Phillips symbol COP short term call

I did execute a trade on COP yesterday, Wednesday Aug 15.  I added to my position at $68.10 net.   I have mixed feelings about COP.

I am not really worried that the stock will go belly up.  Their balance sheet is solid.  My readers know I use debt to equity ratio as my first balance sheet screen.   COP carries is a D/E ratio of .45 which is solid.   But COP's dividend yield of just over 1.5% is less than I need.  On the other hand that dividend is growing which an income investor like me needs.  

I own quite a bit of COP and here is how I work it.  First I reinvest the dividend.  Next, I add to my position on weakness.  COP has a history of some volatility.


Then I sell short term calls to try to capture more than 5% in potential gain within 30 days.   These parameters are not set in stone.

A short term call to me is an expiration date 30 days out.  My typical long term call expirations go past the next ex-dividend date but not much more than 90 - 100 days.  I have done calls with expirations dates as short as 4 days.  That is more common on a stock that I think I can make money from the call but don't really want to establish a long term position in the stock because it is not a dividend payer or grower.  An example would be Twitter.  If you click on the 2018 covered call trades portfolio you will see the TWTR trade. 

COP is a quality stock and I can suffer through holding it should the price of my shares fall below the call strike price or even below my cost basis.

Here is the call I executed today on COP.

Notice that I will add just over 1% of yield on this stock.  So if I end up holding this lot, I will make the dividend of just over 1.5% and the premium from this call of 1.13% so now I am inching toward my desired income of 5% on my stocks.    With these short term calls, you can sell them over and over if you are lucky.

Now, if this lot of COP is called away, my max gain will be 7.59%.  I can live with that kind of return in just over a month.  This is how you work your portfolio.

M*  MoneyMadam
Disclosure:  Long COP with calls
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Monday, February 6, 2017

COP and WGL dividend increases

COP and WGL are both Dividend Machines. COP made the grade four times and then decreased the dividend and suffered further significant stock price erosion.

COP Cost Basis History

     COP 2015 $65.66
     COP 2014 $80.35
     COP 2013 $59.84
     COP 2011 $68.00 adjusted for PSX spin off

     Average cost basis:  $68.46

I am long COP and have had the good luck to sell calls that generated more income. But this holding has been very painful.  I am a patient investor and am hoping the latest dividend raise portends of good things to come.

WGL was a 2012 Dividend Machine with a basis of $39.89.  This stock is a home run.

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Monday, February 8, 2016

COP very painful dividend cut

February 8, 2016

Conoco Phillips, symbol COP leads the way on the negative side.   Huge dividend cut.  COP will pay $.25 a share on March 1, 2016.  COP will be ex-dividend on February 11, 2016.    COP's previous dividend was $.73 per share.

For stocks like this I had hoped to build shares through dividend reinvestment.   A dividend cut is needed to preserve the safety of the principle invested in COP.   I will continue to hold as I think it is too late to sell.  I will continue to reinvest the meager dividend.  

Some attractive calls are available to boost your income and make up for the dividend cut.  In this case you need to select a strike price much higher than your basis so make sure you do not have your COP called away and suffer a capital loss while you wait for the market to turn around.  Keep your expiration dates a short as possible.

The table below illustrates a call available today that is risky when you look at the potential capital loss but encouraging for income.

Challenging times for income investors.  Do not panic.  Work your portfolio with a bias toward income.

M* TheMoneyMadam

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Tuesday, April 21, 2015

COP Still a good Dividend Machine

ConocoPhillips - Asset Sales And Conventional Reserves Development In Focus $COP
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Friday, February 27, 2015

Should you buy COP?

This post discusses Conoco Phillips, symbol COP.  

I am long COP and it has been a Dividend Machine multiple times in the past.  Should you buy COP for the income producing portion of your portfolio?

COP Dividend Machine History


On May 6, 2011, COP was the 26th Dividend Machine I profiled for the 2011 Dividend Machine model portfolio.  Had you bought then, you would have paid $71.43.  Your dividend income would have been $2.64 on earnings of $8.30.  Dividend yield was 3.695%.  Debt to equity ratio was .33 and earnings (EPS) were $8.30.


On May 1, 2012 COP spun off PSX the refining portion of the business.  You would now own 100 shares of PSX and 100 shares of COP. 


On April 9, 2013 Conoco Philips was again picked to be included in a Dividend Machine Portfolio.  COP’s price at that time was $59.84.  Dividend was $2.64 on earnings of $6.69 for a yield of 4.41%.   D/E ratio was .45.


On March 27, 2014 Conoco Philips made the grade again and was added to the 2014 Dividend Machine model portfolio at a price of $80.35.  Earnings were $7.38, dividends $2.73 for a yields of 3.92%.  D/E was .4156.

Discussion of COP Dividend Machine History

The 2011 investment of $7,143 is now worth COP 100 shares times $65.66 plus 100 shares of PSX at $79.56 or $14,522.   Nice capital gain!  Moreover, Dividend income of $264 per year has now increased to $292 from COP plus $200 from PSX for a total of $492.   Nice income increase!

The 2013 investment has done well but not as well as 2011.   But then nearly every stock bought in 2011 has delivered good gains.   The 2013 investment of $5,984 in COP would be worth $6,566 today.  The dividend would have increased from $2.64 to $2.92; an increase of 10.6%.   Do you have another investment you made in 2013 just 22 months ago that increased your income by 10.6%?  

The 2014 investment in COP is losing money.   While COP met all the Dividend Machine criteria when I wrote about it, the price of oil has killed this sector. Your investment of $80.35 would be worth only $65.66 or a loss of 18.28%: ouch!.     Your dividend of $273 would have increased to $292 for an increase of 6.959% in less than a year.

Should you buy COP today?

I write about the stocks I buy for the income producing portion of my portfolio and when those stocks meet all four of my Dividend Machine criteria, I add that stock to the current year’s model portfolio.  I will add COP to the 2015 Dividend Machine model portfolio.

Sale is one of my favorite words when I shop and COP is on sale while it meets all the Dividend Machine criteria for 2015.   I will be adding to my COP holdings but I will use the volatility of the energy market to also sell calls on the new shares.    This additional income will help salve my wounds from the 2014 buy.

The tables below present COP’s Dividend Machine Fundamentals and the covered call I will sell today.

Dividend Machine Fundamentals:


Covered Call Option

Yes, I think you should consider COP for income producing portion of your portfolio.


Disclosure:   Long COP  + May, 2015 calls
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Tuesday, January 13, 2015

COP is dividend safe?

Anyone long COP should read this article. Mm

ConocoPhillips: How Risky Is The Dividend? $COP

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Monday, January 12, 2015

COP earnings.

All we care about is the dividend. MM
Rnergy stocks brace for several ugly quarters to come $SLB, $CAT, $COP, $CVX, $XOM
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Tuesday, January 6, 2015

COP Still love this Dividend Machine

COP: A Great Stock For Income Oriented Investors $COP
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Saturday, November 29, 2014

VIG and SDY Beat 2014 Dividend Machines but not 2013 Dividend Machines

Live by the dividend; die by the dividend.   While the 2014 Dividend Machine Portfolio delivers more income for income investors, the recent slide of oil prices took a toll on energy stocks Chevron, symbol CVX, and Conoco Phillips,symbol COP.    See the comparisons in the table below of year to date performance of two low cost ETF's that concentrate on dividends; VIG and SDY.

I personally would not sell.   If you have cash to invest, you might consider adding to CVX and/or COP.    COP  has a PE of only 9.   Both have healthy dividend yields.  CVX's dividend yield 3.72% with a five year dividend growth rate of 11.47% .  COP's dividend yield is 4.12% with a 5 year dividend growth rate of 9.2%.    Both have good balance sheets.   Chevron's D/E ratio is .13 according to MSN Money and COP's is .35.

You see the biggest question is will these dividends continue and will their annual increases continue.  If the past five years is any indicator of future performance, CVX and COP are bargains.

Using Dividend Machine criteria to pick stocks for the income producing portion of your portfolio is still a good strategy.   This is demonstrated by looking at the 2013 Dividend Machine Portfolio.  Stocks have been on a tear lately and it is not surprising that buying in 2013 provides more gain than buying in 2014.   Take a look at the 2013 Dividend Machine portfolio comparison with VIG and SDY in 2013.

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