I bought today. Don't really understand the selloff although they seem tired to the energy sector. With cheap crude there may be less need for liquefied natural gas. I just think the dividend is safe and a 10 percent yield, I am willing to take the risk.
If they don't have the cash to pay it they won't. It is simple arithmetic. At this earnings rate they are bleeding cash big time. You can only cut expenses and sell assets so long. Sure they will pay the checks for a few quarters but if these low oil prices go on too long they will be dropping the dividend.
Well I said back in January on this very board that I wouldn't even look at CVX until it hit 80. People scoffed back then but look we are almost there. Below 80 there does appear to be some long term value regardless of the short term price action. 60-65 is certainly doable when folks hit the panic sell button. We may be stuck with 50-60 oil for quite awhile and the earnings stream as you can see looks quite different then it did when oil was 100 a barrel.
Never saw why people were so quick to jump back into oil stocks. Market is starting to get bored with oil stocks so they are leaving. Always thought it was ridiculous that people were so quick to jump back on a sinking ship.
Going by current PE is pretty useless. Forward PE is a lot more useful. Even then, forward PE is misleading for AAL because of some one time tax credits that will expire this year. These credits are artificially inflating earnings this year.
This kind of thing happens all the time on Wall Street. They are really manic depressive when it comes to stocks. You just have to tune out the noise. The correct situation is somewhere in between. Look at the way they whacked the whole retail sector on a couple of bad stories. Or more recently the Restaurant stocks. Right now the mood on Wallstreet is getting pretty sour on Airlines. They trot out the usual arguments, excessive capacity, high debt, rising fuel prices. Cramer is just a parrot for Wallstreet group think.