Stock Purchase: Added To CVX Position

Well my second purchase of the month was very similar to my first.  Last week I averaged down on my Realty Income Corp (O) position.  That same day I noticed that my CVX position was down almost 9% and CVX looked very attractive at those levels.  With the price around $101.75 I decided to enter a limit order to buy at $100.15, just above the strong $100 support level for a better chance at a fill.  Today CVX dipped below $100 briefly mid-day to $99.95 so my limit order was filled.

 

I love the company and not much has changed since my original purchase except that the CVX dividend increase is a bit late.  There has been a lot of chatter about the lack of CVX dividend growth.  People are complaining that Chevron’s dividend is frozen and even speculating that their dividend will be cut.  I think it’s a bit early to panic.

Chevron has repeatedly confirmed that they are committed to their dividend.  Sure, they didn’t raise their dividend when they were “supposed to” but they have done this in the past and then continued to raise dividends.

To address the “frozen” dividend issue, I have included a table below that shows Chevron’s recent dividend payments along with the annual dividend totals (assuming that they don’t raise the dividend for the rest of 2015):

Chevron Dividend History

What I want to point out in the table above is that even if CVX does not raise their dividend in 2015, the 2015 totals are still greater than 2014 so the streak is alive.  In fact, Chevron technically has until November 2016 to raise their dividend to maintain their consecutive annual dividend increase streak.  Obviously I hope this doesn’t happen but clearly the streak is not in any immediate danger.

I provided a short analysis on CVX after my original purchase.  I would love to expand on it but my time is limited since I’m currently analyzing the May 2015 dividend growth investor survey data (results should be out Wednesday or Thursday).

Here are the details of my CVX purchase:

 

Stock Purchase: Chevron (CVX)

  • Sector: Energy
  • Industry: Major Integrated Oil & Gas
  • Purchase date: 6/8/2015
  • Portfolio: Dividend Retirement portfolio
  • Shares purchased: 30
  • Cost per share: $100.15
  • Commissions: $14.95
  • Cost basis: $3019.45
  • Yield on cost: 4.25%
  • Forward income: $128.40

This new purchase brings my total CVX holdings to 57 shares with a new cost basis of $6,006.83.  Realty Income’s reign as my largest holding was short-lived (just 4 days) now that CVX has taken over.  My yield on cost for the position increased from 3.87% to 4.06% with this addition and I can now expect CVX to bring in a total of $243.96 per year of dividend income.

My portfolio yield on cost increased from 3.29% to 3.35% and my forward income is now $1,612.08 as a result of this purchase.

My Dividend Retirement portfolio has been updated to reflect the addition of 30 shares of CVX.

What do you think of buying CVX at these levels?  Do you think CVX will continue increasing their dividend soon?  Please let me know in the comments section below!

You may also like...

14 Responses

  1. Cha ching! Great buy of a great company. It will be interesting to see what happens with a strong dollar pushing down crude prices in the short term. Might be a couple more opportunities to raise that overall portfolio yield! Keep knocking down those pins 😉

    • Dividend Empire Dividend Empire says:

      Well I hope it holds here since I’m really overweight on CVX now. But if it drops more I don’t think I will be able to resist. The pins don’t stand a chance :) !

      Ken

  2. DE,

    Great pickup there! Your patience was rewarded. We are trying to work on our patience a bit but it is tough with so many companies coming down to at or near 52 week lows. A couple more purchased and before you know it, CVX will be paying you $1k annually for doing nothing. We are looking forward to the survey results. Thanks for sharing your purchase.

    All the best.

    FD

    • Dividend Empire Dividend Empire says:

      It’s definitely tough to be patient but limit orders make it easier. I had already forgotten about my limit order after just 4 days! I just started using limits a couple of weeks ago and I’m not used to it.

      The survey is taking a lot longer than I thought it would. I only received 21 responses so it is difficult to uncover significant correlations. I have a few interesting graphs so far though and just presenting the raw data will be interesting in itself I think. Take care.

      Ken

  3. Div Kid says:

    DE,

    What do you think about the G7 countries killing fossil fuels by 2100? Sure its a ways (long ways) away, but I feel like my children will see a world independent from fossil fuels. Interesting thoughts.

    Div Kid

    • Dividend Empire Dividend Empire says:

      I think that would be wonderful and achievable. 2100 is a long ways away but they are shooting for a 40-70% reduction by 2050. CVX is researching and developing many different forms of renewable energy to help meet these goals. Thanks for stopping by!

      Ken

  4. Ricardo says:

    Great company, at a great price. We did an analysis and thought the price was about 8% below fair value when it was trading at $107 so at $100 it’s an even better deal. Great company to own. If we can find some change under the couch cushions we’d love to own some shares in Chevron. Keep up the good work. Enjoy reading your blog.

    • Dividend Empire Dividend Empire says:

      Ricardo – thank you for reading and for your kind words. I came to a similar conclusion when I first bought CVX at around $110. Buying at $100 feels like I just received a gift! Gather up that change – I’ll be doing the same to make some purchases in my other (empire) account.

      Ken

  5. Great purchase! The time is now to purchase oil stocks! CVX is near the bottom and will only go up from here! Keep in touch!
    -LOMD

    • Dividend Empire Dividend Empire says:

      Thanks LOMD. I sure hope we are near the bottom because I’m just about all in on CVX at the moment!

      Ken

  6. Tawcan says:

    Great purchase Dividend Empire. You will be very happy with this purchase once the oil price pick up again.

    • Dividend Empire Dividend Empire says:

      Thanks Tawcan! Now that I’ve completely filled up on oil stocks I cant wait for oil prices to head back up.

      Ken

  7. Div4son says:

    Good job with cvx at $100. It’s good to get them when the market dips.
    I will add to cvx or rds.b after my positions on xom are full.
    D4s

Leave a Reply

Your email address will not be published. Required fields are marked *

CommentLuv badge