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1/27/2013

ConocoPhillips: New Stock In My Dividend Yield Passive Income Portfolio

ConocoPhillips (COP) is the company which I selected for my Dividend Yield Passive Income Portfolio (DYPI).

COP is a major integrated oil and gas company which generates around 69 percent of its sales in the United States. ConocoPhillips explores for, produces, transports, and markets crude oil, natural gas, natural gas liquids, liquefied natural gas and bitumen on a worldwide basis.

ConocoPhillips is a Dividend Contender, a stock that raised dividends over more than 10 years but less than 25 years in a row. The company hiked its dividend over 12 consecutive years.

Shale oil and gas could be a good growth drive for the company but more important is the development of future energy prices. If you buy a company like COP, XOM, CVX or something in a related industry you make a commodity bet with several options.

ConocoPhillips is valuated with a P/E of 10.98. The forward P/E is in a similar range. Growth for COP is limited and estimated at 5.35 percent for the next five years but I would say that the true growth figure depends mainly on the future oil price and the costs COP has to explore for oil and gas. The dividend yield of 4.32 percent is one of the biggest in the industry. Only yields from European competitors are higher.

I put 20 shares at $61.06 into the Dividend Yield Passive Income Portfolio. The total purchase amount was $1,221.20. See the tables below.

The COP position represents around 1.2 percent of the full portfolio which was funded virtual with $100,000 on October 03, 2012. The complete portfolio has now 17 stock holdings and generates around $900 per year. I plan to increase the total amount of stocks to a number of 50-70 by the end of this year. As a result, the dividend income should also increase to a value between $3,000 and $4,000.

This shouldn’t be a big problem with still $76,401.45 in cash. All I need to do is to find some attractive valuated dividend stocks. For the time being, its getting harder to find some solid growing stocks with a big yield. But maybe we got some new ones within the next months when they boost their payments to shareholders. We will see.

The DYPI-Portfolio has a total performance of 0.95 percent including dividend payments. Most of my capital is not invested, around 75 percent or so. The return of the invested capital is at 3.52 percent. That’s an underperformance compared to the returns from the Dow Jones and the S&P 500. But I ever told you that the portfolio will underperform if the market goes strongly up because of my slow buy algorithm.


Dividend Yield Portfolio (Click to enlarge)

I ever told you that I don’t like to show how you can make fast money and get quick rich. I only like to demonstrate that you can build-up a long-term dividend growth portfolio which could give you a steady growing passive income and solid capital gains over the long-term. A minimum investment horizon is at least 10 years or more. Not all stocks from the portfolio will perform well, but others will do. That's the nature of the stock market.


Latest Portfolio Transactions (Click to enlarge)

I personally made a six-figure total gross income over the recent ten years. I increased the portfolio value from one of my accounts by the factor of more than 6, only by trading dividend stocks. I am no stock market guru and I don’t like to be treated as one. The return was definitly better than the performance of the broad market but it was no wonder or something else.

The market has great opportunities to offer. You only need to discover some of the best growth stocks with potential to become a game changer. That's real hard work and you need to be a wise and patience investor. At least the time  will bring you wealth.

The Portfolio:

Sym
Name
Last Trade (Price Only)
P/E Ratio
Dividend Yield

Buy
# Shrs
Income
Value
TRI
Thomson Reuters C
30.8
N/A
4.14

28.90
50
$64.00
$1,540.00
LMT
Lockheed Martin C
92.39
11.15
4.45

92.72
20
$83.00
$1,847.80
INTC
Intel Corporation
20.96
9.84
4.15

21.27
50
$43.50
$1,048.00
MCD
McDonald's Corpor
93.72
17.42
3.08

87.33
15
$43.05
$1,405.80
WU
Western Union Com
13.53
6.67
3.15

11.95
100
$42.50
$1,353.00
PM
Philip Morris Int
89.42
17.95
3.65

85.42
20
$65.58
$1,788.40
JNJ
Johnson & Johnson
73.92
18.94
3.28

69.19
20
$48.00
$1,478.40
MO
Altria Group Inc
33.45
17.41
5.09

33.48
40
$68.00
$1,338.00
SYY
Sysco Corporation
31.83
16.78
3.45

31.65
40
$43.60
$1,273.20
DRI
Darden Restaurant
45.87
13.09
4.21

46.66
30
$57.90
$1,376.10
CA
CA Inc.
25.05
12.66
4.02

21.86
50
$50.00
$1,252.50
PG
Procter & Gamble
73.25
19.62
3.19

68.72
25
$56.20
$1,831.25
KRFT
Kraft Foods Group
47.14
14.32
4.24

44.41
40
$80.00
$1,885.60
MAT
Mattel Inc.
37.15
15.78
3.26

36.45
40
$49.60
$1,486.00
PEP
Pepsico Inc. Com
72.49
19.24
2.95

70.88
20
$42.56
$1,449.80
KMB
Kimberly-Clark Co
86.26
18.27
3.42

86.82
15
$44.40
$1,293.90
COP
ConocoPhillips Co
61.06
7.42
4.32

61.06
20
$52.80
$1,221.20


















$1,215.19
$24,868.95


















Average Yield
4.89%


















Yield On Cost
5.07%

3 comments:

  1. Anonymous1/27/2013

    COP had its "buy" rating restated by Societe Generale with a $68.00 target price on January 25, 2013. Analysts at Zacks reiterated a "neutral" rating with a $63.00 price target on January 24, 2013. JPMorgan Chase also reiterated an "overweight" rating on COPY with a $64.00 price target on January 15, 2013. Lastly, Barclays Capital reiterated an "equalweight" rating on COP with a $62.00 price target on January 9, 2013.

    ReplyDelete
  2. Anonymous1/27/2013

    Well, technically, the MACD is showing a bullish trend with diverging MACD difference. The momentum indicator, RSI is showing a strong bullish momentum at 68.13. COP is currently trading above its 50-day MA of $57.89 and 200-day MA of $55.39. The next resistance is $61.15.

    ReplyDelete
  3. Anonymous1/27/2013

    COP has an enterprise value of $96.95B with a market cap of $74.12B. COP has a total cash of $1.27B and a total debt of $24.89B. COP generates an operating cash flow of $15.86B with a levered free cash flow of $4.29B. COP has lower revenue growth (3 year average) of 0.7, as compared to the industry average of 1.6. COP has lower operating margin of 9.1%, ttm, and net margin of 4.2%, ttm, comparing to the averages of 14.4% and 8.1%, ttm, respectively. COP also generates lower ROE of 18.4, as compared to the industry average of 19.2. COP's P/E of 7.4 is lower than the industry average of 10.2 but higher than COP's 5 year average of 7.1. COP has a forward P/E of 9.4, which is lower than S&P 500's average of 13.3.

    ReplyDelete

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