It has been over 3 months since I made any big energy related purchase. The last ones were in November and December when I purchased ConocoPhillips. Since then the energy sector has been range bound and continues to be weak and hasn’t come out of the woods yet. These COP purchases are still in negative territory. But the energy sector still provides one of the most attractive valuations in these market conditions. So I ended up coming back to energy sector with this purchase.
I purchased 30 shares of NOV at $49.00 on 3/24/2015. With commission, the total cost comes to $1,477.00. With a quarterly dividend of $0.46/share, the yield on cost comes to 3.73% and this purchase adds $55.20 to my forward annual dividends.
The stock has a 52 week low of $46.08 and 52 week high of $86.55. The stock could continue to go down based on oil price and there is no way to time it. But given the stock performance in the last few years, the stock has more upside potential than downside potential. Of course, everything is based on investments from other oil companies. One of the reasons I was hesitant on more oil/energy/commodity related purchases due to the fact that I already hold positions in COP, CVX, KMI, BP, PSX and BBL. These stocks made up little over 12% of my portfolio and wasn’t sure if I wanted to add more. But I couldn’t pass up this low price with nice upside potential and this purchase increases my oil/energy/commodity related exposure to about 14+% in my portfolio.
JC at Passive Income Pursuit recently purchased this stock and has additional information about the company. Similarly, Jason at Dividend Mantra purchased this stock last month and has a write up on more information about the company.
Morningstar has a fair value of $66.00 for the stock and it is rated 4 stars.
This is my second big purchase this month in addition to the weekly purchases. I had purchased Phillip Morris (PM) earlier this month.
The portfolio page will be updated soon to reflect this purchase.
Disclosure: Long on all stocks mentioned above