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Portfolio Update: New Addition (CVX and CAT; January 29, 2015)

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I’m currently on a leave of absence from work, so the paychecks may stop coming in soon. I’m currently dealing with the third-party insurance company as we speak, so we’ll see how things go…

With that said, if the ruling doesn’t go in my favor, I probably won’t have the opportunity to keep purchasing more investments in the foreseeable future. Today, I used an opportunity to pick up some dividend stocks at attractive prices.

For my first move, I decided to add some more shares of Chevron Corporation (CVX). I picked up 13 shares at $101.99/share. I now hold 43 shares of CVX.

Next, I initiated a position with Caterpillar Inc. (CAT). I purchased 15 shares at $79.04/share.

Recently, the market has pulled back, and with oil prices still in disarray, there may be many more buying opportunities for investors in the near future. I’m not smart enough to be able to predict the weather, nor do I have a crystal ball, but if I’m going to jump into the market, I would prefer to do so at an opportune time (when chaos is in the air).

CVX is getting hammered as the price of oil continues to fall. CAT had a bad earnings report and guidance has been cut. Not surprisingly, the outlook for sales volume and revenue in 2015 looks bleak, thanks to the fall in commodity prices.

When the markets experience turmoil, I simply see more opportunities. The current dividend yield on CVX is about 4.20%, and CAT is sitting at 3.55%. Pretty solid, and appealing enough where I felt compelled to make a move this morning. If the market continues to trend downward, I’ll sincerely hope that my cash out refi on Rental Property #1 is completed so that I’ll have ample funds to invest with… As an investor, nothing gets me more excited than being able to pick up assets at (or near) 52 week lows. I have no problem dollar cost averaging down on stable companies that I believe will be around for the long haul.

Maybe fun times are back? Happy hunting everyone! 🙂

{ 16 comments… add one }
  • markNo Gravatar January 29, 2015, 9:22 am

    I forbid anyone from buying CAT right now. Newer lows will be made, it is in a strong down trend. Worst investment since ALI BABA. You would have been wise to head my BP call it has done remarkably well since I made the comment on your thread. I would not be playing oil right now.

    Don’t bottom fish at these level folks.

  • FI FighterNo Gravatar January 29, 2015, 9:55 am

    Just a small dabble today… only 15 shares of CAT. I’m not immune to bad moves, but I’m also not trying to trade and make a quick buck either. I’m ok with long-term holding and collecting the dividend.

    Perhaps you could enlighten and provide your sure-fire picks moving forward?

  • markNo Gravatar January 29, 2015, 11:01 am

    Don’t throw good money after bad. Your right 15 shares doesn’t move the needle but why lose on it when you can put it to work and make money instead of flat or to the negative side. Oil may be flat for an extended period of time and if it is that’s money that is not working in your favor.

    You need to buy home builders. Mark my words on that for 2015 it will be the banner index. Pick up some pharmaceuticals, the fundamentals are in place to support current valuations and stalwart dividends. Steer clear of utilities for now, i sold out on monday from my entry in june/july last year. I own healthcare predominately (not biotech). That has growth and safety and should hold you over for a few years.

    best of luck

    • FI FighterNo Gravatar January 29, 2015, 5:11 pm

      Thanks for sharing. Hope the picks work out for you!

  • markNo Gravatar January 29, 2015, 11:05 am

    Also Fifight, you must follow the cash flow. Less cash flow from the company balance sheet = lower to no dividend. CAT is telling you that they will have reduced revenue so you should expect your dividend to be at risk or even the perception of it at risk and investors will take flight. Buy companies with growing revenues.

    😉

  • Retire Before DadNo Gravatar January 29, 2015, 12:19 pm

    FIF,
    I bought a little more CAT today too to average down. It’s really taken a beating. Also, great price picking up CVX.
    -RBD

    • FI FighterNo Gravatar January 29, 2015, 5:18 pm

      RBD,

      Yeah, CAT’s beat up now and as mentioned above could have further ways to go down. There seems to be support around $79, but if that’s breached, look out below. It’s a really volatile stock. Still, I like the dividend growth in recent years, and they have been increasing payouts every year since 1994… so 20+ years. The payout ratio of 40% isn’t too bad either.

      The historic yield for this stock is below 3%, so I’m comfortable enough to initiate a position at 3.5%. There may be headwinds in the short term, but CAT is an iconic name that I don’t see going away anytime soon.

      All the best!

  • TawcanNo Gravatar January 29, 2015, 1:25 pm

    Great pick up on CVX. CAT is looking attractive but I think it may continue to go down for a bit longer. Investing a small amount in CAT might be worthwhile in the long run.

    • FI FighterNo Gravatar January 29, 2015, 5:21 pm

      Tawcan,

      Yeah, I like CVX around $100/share and below. I took a flyer on CAT, but just a small nibble as well.

      2015 will be an interesting year!

      Take care!

  • MarkNo Gravatar January 29, 2015, 2:32 pm

    +1 point for Tawcan. -1 point for retire before dad.

    • FI FighterNo Gravatar January 29, 2015, 5:22 pm

      ahh shucks I guess I score a -10 today… Not only did I buy CAT but I also closed escrow!

  • A Frugal Family's JourneyNo Gravatar January 30, 2015, 10:20 pm

    We just bought shares of CVX today at the century mark ($100). Great company, great yield, at a great price…what’s not to like! 🙂 Plus, the next Ex-dividend is in 2-weeks so we will be getting a return on our money fairly soon. Cheers! AFFJ

    • FI FighterNo Gravatar January 31, 2015, 9:04 am

      AFFJ,

      Great entry point! CVX is a great deal at or below $100 in my eyes. I will load up on many more shares if it breaks $100 and falls below.

      All the best!

  • The StoicNo Gravatar January 31, 2015, 10:39 am

    CAT and CVX both are on a very short list of stocks I’m looking at right not. I’m still on the sidelines, but I’m with you; I’m more interested in purchasing shares of any company when there are short-term concerns that put pressure on the stock price.

  • Dividend DreamsNo Gravatar February 7, 2015, 5:52 pm

    Great pick-up of CVX at a fantastic price. This stock is likely to be rocky for a while, but in the long run CVX is a good stock to own.

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