Time to sell stock pick Total
I've collected my dividend, so it's time to move the oil and gas giant out of my dividend income portfolio.
On May 31 I wrote that I would sell shares of Total (TOT) out of my Dividend Income portfolio -- but not quite yet. (The sell decision was based on the downward trend in oil prices and the fact that Total was in a capital spending phase that wouldn’t turn into cash flow until 2014. You can see more details on that argument in my post.) I decided to wait to sell until the company had paid its next dividend on Monday. (The stock went ex-dividend on Monday and the dividend is scheduled to be paid Thursday to shareholders of record.)
I got a number of comments suggesting that I should sell now, since the market seemed to be headed for a drop (absolutely right, as it turned out), and others noting that stock prices drop by the amount of the dividend payout after the payout -- so why hang around. For what is a dividend income portfolio I chose to hold on to collect my cash, however, since generating income is a big part of the goal of this portfolio.
So how did my decision to wait to sell until after the dividend payout work?
The shares closed at $49.85 on May 31 and after the bounce of the last few days they closed Thursday at $48.48 as of 3 p.m. New York time. The dividend payout Thursday is .59 euros, or 77 cents at Thursday's exchange rate.
By waiting to sell I lost 60 cents a share.
The gain on these shares was 3.24% from my purchase price on May 28, 2010. At the time of purchase the stock paid a yield of 6.5%.
Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund, I liquidated all my individual stock holdings and put the money into the fund. The fund did not own shares of Total as of the end of March. For a full list of the stocks in the fund as of the end of March see the fund’s portfolio.
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