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.

By Jim J. Jubak Jun 27, 2013 7:40PM

Image: Oil drilling platform (© Scott Gibson/Corbis)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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