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Fifth Street Finance Corp. Message Board

  • thewisejman thewisejman Oct 23, 2013 10:17 AM Flag

    Good time to shop for ENERGY stocks

    Right now everybody believes that US may become oil dependent soon. I beg to differ. I believe such oil boom in the States may disappear in about twenty years or faster due to higher and higher costs of extracting oil in the States (by fracking), the environmental costs and the inabilities of mainly oil towns/cities' to handle such large increase in population due to the oil boom. In short, this oil boom may end up in fates similar to the gold fever and silver fever in the states and many oil towns will become ghost towns in decades to come.

    That is why now many oil/energy stocks may not fare well, but I believe this may soon change. If you have any favorite oil stocks, it may be the best time to start shopping. Look at both COP and RDS-B, both are paying a 3.82% and 5.07% yield respectively. If you want to buy some for your regular account, RDS-A is paying a 5.30% yield (has withholding tax, therefore not good for IRA accounts), where can you get such a yield from an oil stock?

    If you do not mind tobacco stocks, they will be another good place to invest. Both PM and VGR are good long term holds. I bought PM at 84.41 on 10/9/13, even it dropped slightly today, it was already up 3.79% and with a yield of 4.29% (it kept increasing its dividend), I really cannot complain. VGR's yield is 9.15%. I bought it when its yield was about 10% (at lower price). Some fear that it may not be able to sustain its future dividend, but it has been paying its current dividend for years and it has a bunch of cash. So if you are not greedy, it should have a place in any investors' portfolio, IMHO. Of course, you must do your own diligent homework before you buy any stocks. GLTA.

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