Recent buy – KMI
KMI is a energy company. I initiated a position a few months ago, needless to say the stock has shed a ton. I’m averaging down. I think oil companies might not have reach the bottom yet, as the Iran nuclear deal has running thought “smoothly”, us-Russia relation is restoring, there could be more Russian’s oil hitting the market? The Chinese growth has been slowing sending energy sector down by 20-70% from 52 weeks high.
So why am I picking KMI?
- High yield. Sitting at $27. It’s now yielding at 6.7%. Try to get that from a saving account.
- Averaging down. Once I take a position, I don’t sell. So, average down is probably the best way to reach back to breakeven point.
- The stock price is less than the post split price. yet, if you invest in 2011, you’d still improve by 17%. That has just showed me the power of dividend paying stock, you’d still be ahead even the stock has shed 50%. Pretty cool stuff.
- The company has 80,000 miles of pipelines for natural gas. This business just don’t stop even of the price drop.
- It operates a refinery business. Regardless, the oil price, the refinery cost is a fixed amount. So, they will still make a profit.
- Dividend aristocrats don’t cut dividend. They would rather cut cost, lay off employees, but they don’t stop paying dividend, don’t cut dividend, otherwise investors will lose trust, and the stock price will plummet like there is no tomorrow.
What’s about you? Have you make any buys lately?