For my purchase of this month I got inspiration from the dividend Bert’s October Dividend Income Summary. Normally I share many stocks on the dividend received list of other dividend bloggers, but in October there was not a single one company I shared with Bert.
This inspired me to take the companies from his list do some research about those companies and in the end I added Legett & Platt, Occidental Petroleum and Illinois Tool Works to my watchlist.
When selecting my potential buy for November, Occidental Petroleum was immediatelly scoring very high in my ranking model and I decided to place an order.
Occidental Petroleum is mainly scoring high in my ranking model based on their cashflow, yield and from being around their 52 weeks low.
On the otherhand I also deduct some ranking points in my model as Occidental is also having some higher than average risks such as possible short term issues related to integrating Anadarko, possible stock dillution due to the warrants given out to Berkshire Hathaway as part of a financing deal and maybe even a dividend reduction to fund debt reduction. Although the cashflow should be sufficient to continue the current dividend.
Occidental Petroleum is YTD down almost 40% and I consider this a good moment to start a position in Occidental Petroleum and I purchased 48 shares at $38,32.
With this purchase I add $151,68 to my yearly estimated dividend income. My yield on cost based on the current dividend of Occidental Petroleum is 8,25%.