I was recently paid a compliment by a client. The complement (It) was much appreciated. I thought I would share the details surrounding the conversation.
When the price of oil plummeted two years ago I decided it would be a great opportunity to purchase many high dividend energy stocks at a deep discount. And due to the deep discount the yield on those energy stocks were higher than normal.
For this client, we did purchase high dividend paying energy stocks. We invested in the energy stocks knowing that the price of oil and natural gas would be low for an extended time. And over time some of the energy companies would cut their dividends. And some companies did.
But while including those that cut their dividends, the average yield of the portfolio was and still is substantial. We are beating rates from money market, CD rates, treasury rates, municipal bond rates, fixed annuity rates, equity index annuity rates and corporate bonds.
I am not going to quote any yields in this blog due to regulatory considerations. You will have to call me to find out the current dividend yields.
But our game plan has been to wait out the time for oil and natural gas prices to move up and
encourage the energy stocks to increase in price. We have collected our high yielding dividends while we have been waiting.
So far, very good.
I did this with many clients. For some I was able to invest them when oil was selling for $36.00 a barrel. They are very happy clients. They already have substantial capital gains built up in price appreciation. And they are enjoying the high dividend income as well.
The dividend income we have received has been reinvested into more high dividend paying energy stocks: we are compounding the effects on the portfolio.
Oil has recently dropped back down below and around $50 per barrel. We again have an opportunity to buy more.
Back to my client. She commented that some of the stocks values are down, but they are still paying some amazing dividends, her words. She is very appreciative. As are many other clients.
For those of you who fill up your car with gas, burn propane in your gas grill(s), or use the same propane to heat your home, and for those whose electricity is generated by natural gas. We thank you.
Maybe you should give us a call to find out how you can collect the same high dividends.
Corey N. Callaway
Investment Advisor Representative