As many of you are aware, the depressed price of crude oil has dropped many of the worlds top oil and gas companies to their knees. This is primarily due to the price of oil being very closely correlated to the earning potential for businesses in this industry. It all started back in mid-2014 where the price of crude oil started dropping. It went from being around $110 per barrel in middle of that year, all the way down to $31 per barrel in January 2016. It was the lowest drop in crude oil for more than 10 years. Since then, the price of crude oil has been slowly recovering and is currently at $47.51 per barrel. Just wanted to touch on a brief history what has happened these last few year to the price of crude oil and you can clearly see the reliance of the price with many oil and gas companies and sectors that are connected within. Here is a great source for keeping track of crude oil price that I personally use.
As much as I hate selling any portion of my dividend income portfolio assets, this one needed to be severed from the rest of the group. I chose to go ahead and sell out of Chevron Inc. (CVX) position entirely, as its fundamentals, growth and future has been greatly diminished. I understand the company is going through a tough patch as many companies in this field are, though I am not willing to wait it out for the company to recover. In my view of things, I know there are better opportunities out there. Here is a few strong reasons why I decided to liquidate my stake of Chevron Inc. (CVX).
- Straight 8 quarters without dividend raise
- Payout Ratio is highly unstable
- High probability of dividend cut
- High Debt leverage
- Unknown future for the dividend growth
I sold all 8.257 shares of Chevron Inc. (CVX) for the price of $102.35 lowering my annual dividend income by $35.34.
The 12-month dividend income decreased to $2,558.