Day: April 2, 2020

The Whiting Petroleum Bankruptcy: Future for Stockholders

 

Many of you may have seen that Whiting Petroleum recently announced its bankruptcy, which is significant news to me that I consider worthy of a quick case study.

For those of you who are unfamiliar, Whiting Petroleum is one of the largest Exploration & Production (E&P) corporations in the oil sector (ConocoPhillips is the largest). E&P companies, often called “upstream oil producers”, do exactly what comes to mind when you picture oil being driven from the ground. Other sectors of the “oil economy” are midstream, which involves the transportation, storage, and marketing of oil, as well as downstream, which involves the conversion of oil-products into gasoline and jet fuel. 

When the price of rises or falls, it is E&P companies that are the primary beneficiaries or adversely affected entities because they are selling the oil that they produce (whereas the midstream and downstream participants are much more reliant on the … Read the rest of this article!

The Twin Pillar Stocks of Dividend Investing

 

Between 2011 and 2015, Procter & Gamble raised its dividend from $1.97 per share to $2.65 per share. During these four years, each share of P&G that got purchased at $60 in 2011 paid out $11.50 in cumulative dividends if you forward count the September and December payments. At an average reinvestment price of $68.23 over the past four years, and assuming the final two payments get reinvested at the current market prices, an investor would have created 0.168 shares of Procter & Gamble over the past four years just by making a singular decision in 2011 and checking off the reinvest box.

I mention this because the past four years have been nothing great for Procter & Gamble. In fact, you could argue that it has been one of the worst relative stretches in the company’s history because it has only grown revenues by 2.5% annually over the past … Read the rest of this article!