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The first of the oil majors, COP, cuts the dividend
Posted on 2/4/16 at 7:26 am
Posted on 2/4/16 at 7:26 am
66% decrease from $0.74 to $0.25 quarterly. Shares are tumbling pre market.
Posted on 2/4/16 at 7:32 am to TigerTatorTots
I had thought people were saying this one was safe, and CVX was dangerous. Ah well, it goes like it goes.
As an aside, I'm going to start looking for an reentry point on COP now.
As an aside, I'm going to start looking for an reentry point on COP now.
Posted on 2/4/16 at 7:42 am to TigerTatorTots
Think BP is far behind in cutting divvy also?
Posted on 2/4/16 at 7:50 am to TigerTatorTots
Can someone dumb this down for me?
So a $.25 per quarter divided means that for every share of COP I own, I get $1.00 per year back.
Example, I buy 1,000 shares of COP at $35 per share. I just spent $35,000. In dividends alone, I would have $1,000 per year?
So not counting any stock appreciation, I am getting roughlya 3% return on my money? Correct?
So a $.25 per quarter divided means that for every share of COP I own, I get $1.00 per year back.
Example, I buy 1,000 shares of COP at $35 per share. I just spent $35,000. In dividends alone, I would have $1,000 per year?
So not counting any stock appreciation, I am getting roughlya 3% return on my money? Correct?
This post was edited on 2/4/16 at 7:51 am
Posted on 2/4/16 at 7:55 am to I Love Bama
In real estate terms, it would be about 2.7 cash on cash. Based on last pre-market trade. But I think if you don't take dividends as income, it would be 2.7 tax free.
My opinion only, this isn't a stock to buy for dividends in the current environment. At some point, and based on today's news we are closer, it is a stock to buy for long term appreciation. The dividends will take care of themselves one way or another eventually. Also, no way this should have been bought pre announcement.
My opinion only, this isn't a stock to buy for dividends in the current environment. At some point, and based on today's news we are closer, it is a stock to buy for long term appreciation. The dividends will take care of themselves one way or another eventually. Also, no way this should have been bought pre announcement.
Posted on 2/4/16 at 8:01 am to Iowa Golfer
quote:Dividends in a taxable account are taxable whether the stockholder reinvests the dividends or takes them as a cash payout.
if you don't take dividends as income, it would be 2.7 tax free.
If reinvested, the dividends increase the cost basis of the holding by the amount of the dividend thus lowering the taxable gains when the holding is eventually sold.
Posted on 2/4/16 at 8:10 am to I Love Bama
quote:
So a $.25 per quarter divided means that for every share of COP I own, I get $1.00 per year back.
Example, I buy 1,000 shares of COP at $35 per share. I just spent $35,000. In dividends alone, I would have $1,000 per year?
Yeah, but it was $3,000. That's the terrible news.
Posted on 2/4/16 at 8:11 am to Iowa Golfer
quote:
My opinion only, this isn't a stock to buy for dividends in the current environment. At some point, and based on today's news we are closer, it is a stock to buy for long term appreciation.
I'll be looking for an entry point later in the month. I'd like to see it drop just a bit more.
Posted on 2/4/16 at 8:15 am to TigerTatorTots
anyone think XOM will cut dividends too?
Posted on 2/4/16 at 8:20 am to mydadpulledout
If XOM cuts, then we have issues much bigger than what we are seeing today. They will be the last to cut
Posted on 2/4/16 at 8:26 am to mydadpulledout
I don't think XOM will cut its dividend. Over the years XOM has been criticized for its conservative dividend payout versus the other major oil companies. XOM's dividend philosophy has always been 'slow and steady.'
For example, XOM's dividend was lower than COP's dividend (prior to COP's just announced div cut) although XOM's price was almost double COP's price per share.
And XOM announced its 4th quarter earnings just two days ago. In spite of the low price of crude, XOM still had net profits of almost $60 billion in the fourth quarter of last year beating analyst estimates by almost $7 billion.
Full disclosure, XOM is my largest stock holding.
For example, XOM's dividend was lower than COP's dividend (prior to COP's just announced div cut) although XOM's price was almost double COP's price per share.
And XOM announced its 4th quarter earnings just two days ago. In spite of the low price of crude, XOM still had net profits of almost $60 billion in the fourth quarter of last year beating analyst estimates by almost $7 billion.
Full disclosure, XOM is my largest stock holding.
Posted on 2/4/16 at 8:38 am to LSURussian
XOM also has downstream operations. I think this is significant in a depressed oil price environment. In a good way for XOM.
LSU is also correct about reinvested dividends being taxable. I guess I never noticed this on my 1099's before. Another reason to simplify the tax code. The brokerage 1099's are 50 pages long, and they send amended 1099's for the next 9 months. I don't know how anyone keeps up with that crap.
LSU is also correct about reinvested dividends being taxable. I guess I never noticed this on my 1099's before. Another reason to simplify the tax code. The brokerage 1099's are 50 pages long, and they send amended 1099's for the next 9 months. I don't know how anyone keeps up with that crap.
Posted on 2/4/16 at 8:59 am to LSURussian
If you reinvest though you have to keep track of that for tax reasons down the road right?
Posted on 2/4/16 at 9:02 am to jimbeam
seems like it would be better to keep in a roth account
Posted on 2/4/16 at 9:02 am to Iowa Golfer
quote:Schwab's 1099s aggregate all taxable dividends on line 1b regardless how many pages the 1099 is. And I only have to e-download the 1099 directly into the TurboTax software and it handles the reporting requirements. That includes all of my trades during the year.
reinvested dividends being taxable. I guess I never noticed this on my 1099's before...
The brokerage 1099's are 50 pages long,
One of the advantages (maybe the ONLY advantage) of doing my own taxes is it forces me to pay attention to tax documentation details.
Posted on 2/4/16 at 9:06 am to jimbeam
quote:I used to keep my cost basis from reinvested dividends on an Excel spreadsheet for many years. My basis and the cost basis shown by Schwab on my broker statements was always within a few pennies of each other so I stopped keeping it myself and now just rely on Schwab to keep track of it.
If you reinvest though you have to keep track of that for tax reasons down the road right?
Plus when I sell, it's Schwab's number that gets reported to the IRS anyway and if I disagree with the basis I have to edit it and then risk having to explain the difference to Big Brother.
Posted on 2/4/16 at 9:09 am to jimbeam
quote:
If you reinvest though you have to keep track of that for tax reasons down the road right?
Yes, as your basis in these additional shares essentially is the cash value of the dividend. However, if you have a broker worth a damn, they will track this for you. If you have a DRIP, they will track it for you. So you only need to track it if you want to, or if you hold shares in certificate form.
Posted on 2/4/16 at 9:11 am to I Love Bama
quote:
So not counting any stock appreciation, I am getting roughlya 3% return on my money?
Yes, on your original investment.
Growth stocks are growth stocks because the company keeps cash for growth, instead of paying it out.
For the most part, stocks that pay dividends appreciate at a slower rate than those who don't.
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