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Paul Wagner

 
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  • Which Big Oil Dividends Are Safe? [View article]
    Dale..."If revenue at risk exceeds profits, that a bit of a problem, I'd guess""
    Depends on what you mean by "problem". Certainly doesn't bode well for profits going up or staying even, but doesn't suggest the company would lose money. For hypothetical example: if normal NPAT = 10% of revenue and revenue falls by 10%, who knows how much NPAT would go down, but likely more than a proportional 10%. The answer depends to a large extent on gross margins and fixed cost absorption.
    Dec 18, 2014. 04:53 PM | Likes Like |Link to Comment
  • Which Big Oil Dividends Are Safe? [View article]
    Dale Roberts...In my opinion, XOM is profitable even with the sort of drop in revenue the article describes as "at risk".

    "At risk revenue just about equals profits plus costs..". I don't understand that statement. Are you assuming that 100% of XOM's costs are fixed? Unlikely. I don't have a position in XOM, but I'm quite sure it purchases much of its product and would pay the lower prices for crude, which would mean a bunch of its costs are variable.
    Dec 18, 2014. 12:54 PM | 1 Like Like |Link to Comment
  • 3 Highly Profitable MLP Refineries That Are Sound Investments [View article]
    Steve...what is the spread between Midland and Cushing now? Ninety days ago?
    Dec 18, 2014. 11:15 AM | Likes Like |Link to Comment
  • 3 Highly Profitable MLP Refineries That Are Sound Investments [View article]
    Robert Hennecke...I didn't mean to "chastise". Just offering what I believe to be sound advice. I did read up on ALDW at sec.gov; a little complicated with intercompany transactions. One thing I did take away was that the lower the spread between the Midland price and the Cushing price and between the Cushing price and the Brent price, the worse it is for ALDW's margins. Seems like spreads would have narrowed a lot of late. I don't track the spreads but someone here might.
    Good luck.
    Dec 18, 2014. 11:14 AM | Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Mike...consider the suggestion made. It's posted to the contributor forum thread titled "editorial" something or other as a reply to an earlier thread about your nifty fifty update article of a couple of months ago. Any contributors wanting to add their voices in support, please do.
    Dec 18, 2014. 11:05 AM | 1 Like Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    DavidVK...I think Mike showed good judgment by leaving his judgment out of it. The performance of this portfolio will be instructive on several levels like dividend growth as a passive strategy; diversification; equal weighting. Once you throw management into the mix, there would be a tendency to critique the manager ability and psychology disproportionately to the strategy, i.e. if the portfolio performed poorly we could all say "it was Mikey's fault".
    Dec 18, 2014. 10:08 AM | 3 Likes Like |Link to Comment
  • It's New! It's Nifty! It's The Dividend Growth 50! [View article]
    Mike...I like the fact that you're using real money and laying out the B&H strategy ahead of time.

    It would be great if SA had a capability, like marketocracy.com, to track the portfolio in real time, even if it is a long-term, no cut strategy. In fact, come to think of it, SA would serve us all with that capability -- a lot of claims are made on these pages that are beyond scrutiny. You and your co-conspirators in developing this portfolio have certainly provided SA with a few billion page views by now, so maybe you could exert some influence on the powers that be.

    Lastly, I have one point of disagreement: it's not a loooong time from 54 to 70. Trust me. Not long at all.
    Dec 18, 2014. 09:46 AM | 8 Likes Like |Link to Comment
  • Which Big Oil Dividends Are Safe? [View article]
    hahaha48..'extremely safe"...Exxon probably as free cash is strong and debt is low. Chevron questionable as free cash is currently negative, debt has more than doubled in three years and no longer " very low".
    Dec 17, 2014. 10:37 PM | Likes Like |Link to Comment
  • Best Long Idea For 2015: BNCCORP [View article]
    ChrisDeMuth...may I suggest that you simply record your buys and sells as SA Stock Talks at the time you do the transactions. That kind of record speaks for itself. I started doing that in 2014. I am not an investment manager or advisor, so I have no reason to blow smoke about my successes or failures, but my transactions are on record for anyone wanting to see them. I've been right some of the time and wrong some of the time.
    Dec 17, 2014. 08:30 PM | 1 Like Like |Link to Comment
  • Why You Should Not Sell Your Oil Stocks At A Loss [View article]
    MAYHAWK...I think I already knew everything you took time to advise me of, i.e. beginning balance plus dividends plus capital gains minus capital losses minus distributions = ending balance. Ending balance times RMD percentage (see the tables) = RMD.

    What still perplexes me is how, in a taxable account, 100 shares of stock in ABC purchased today has a different basis than 100 shares of stock in ABC transferred to my taxable account from my IRA today. Once I understand that magic, I'll have to think about maybe doing that sometime.

    "Are you now being taxed on your age?". No. As a veteran, the age tax has been waived for me. I will be subject to RMD in a couple of years, though. ;=)>
    Dec 17, 2014. 02:39 PM | Likes Like |Link to Comment
  • Which Big Oil Dividends Are Safe? [View article]
    richjoy and anyone else: I ran some numbers and now I have some time invested, so I may do an article. Meanwhile, as pertains to CVX (numbers are in millions)
    9 mos to 9/3014: divs of $5,926/Net Income $15,838 = 37.4% payout
    9mos to 9/30/14:divs of $5,926/Free Cash Flow (961) = N/A

    2013 fiscal. dividends of $7,474/ Net Income $21,597 = 34.6% payout
    2013 fiscal: dividends of $7,474/ free cash flow ($2,983) = N/A

    2012 fiscal: dividends of $6,844/Net Income $26,366 = 26.0% payout
    2012 fiscal: dividends of $6,844/Free Cash Flow $7,874= 86.9% payout

    2011 fiscal: dividends of $6,136/Net Income $27,008 = 22.7% payout
    2011 fiscal: dividends of $6,136/Free Cash Flow $14,595=42.0%

    Obviously a big difference between the metrics and the most commonly used ratio paints a much rosier picture in every period. The primary culprit has been capex well in excess of depreciation. The result? Growth in total interest-bearing debt (short-term plus long-term debt). At 12/31/11, it was $10,024. At 9/30/14, it was $25,625.

    Remember: these results were through September.

    I won't be buying any CVX today.
    Dec 17, 2014. 01:40 PM | 5 Likes Like |Link to Comment
  • Which Big Oil Dividends Are Safe? [View article]
    richjoy403..."Perhaps you could demonstrate your point by comparing the payout and FCF ratios for the companies above?"

    Thanks for the suggestion, but having just arrived in Arizona for the winter, the timing is not great. On the other hand, it's raining here and I might get motivated to at least compare one of them, probably CVX where I'm considering doubling up my position if the numbers justify it.
    Dec 17, 2014. 10:17 AM | 1 Like Like |Link to Comment
  • Which Big Oil Dividends Are Safe? [View article]
    A commendable effort to put the situation in context, with room for improvement.

    I wish the author had examined free cash flow instead of earnings and cash on hand. Earnings payout ratio is often quoted but nearly as often of questionable value. Dividends are paid in cash, not earnings.

    Examining historical free cash flow including how much, if any, of it has been spent on buybacks, debt repayment and dividends and how much cushion has been left over would have been a useful analysis. (Cash on hand isn't really a cushion; to the extent that a certain amount of cash is necessary just to operate the business, it can't be used to pay dividends.)
    Dec 17, 2014. 09:16 AM | 10 Likes Like |Link to Comment
  • We've Now Approached 'Stupid' Levels For Prospect Capital [View article]
    timmnsa: thanks for the clarification. A relative rounding error, apparently serving some obscure purpose, that shall remain a mystery -- to me, anyway.
    Dec 17, 2014. 08:54 AM | Likes Like |Link to Comment
  • Why You Should Not Sell Your Oil Stocks At A Loss [View article]
    18214212. "(I always take the dividend as more shares in order to compound and so as not to create a taxable event)."

    Could you kindly expand on that strategy? I know about stock dividends (which are relatively uncommon) and I know about regular cash dividends, which are taxed in non-tax-deferred accounts. But, taking a regular dividend as more shares?? I'm ignorant about that.
    Dec 17, 2014. 12:32 AM | Likes Like |Link to Comment
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