Recent Buy

I’m looking for companies that are fairly valued, have a decent dividend yield(3% to 6%) and have a fairly long history of paying dividends consistently for 10 years or more. However, there could be some cases for exceptionally good company or a strategic buy for a very long term.

Here is my recent buy in the month of August 2015.

1) ONEOK, Inc. (OKE)

ONEOK, Inc. is a diversified energy and a partner company of ONEOK Partners, holding 41% interest. It engages in processing, transportation and storage of natural gas liquids (NGL) in United States. The company was founded in 1906 and headquartered in Tulsa, Oklahoma. 

OKE has a juicy dividend yield of 6.67% and a market cap of $7.59B. It ran up to $71.19 at its 52 week high, currently trading at $36.59 and is almost 50% lower. This price provides an excellent entry point to investors, though, it could go lower in short term, however, this price point serves a good base to build on. OKE is in process of building a pipeline in Permian Basin to Mexico in west Texas. Its dividend guidance has been lowered and there may be downside risks, but, I like its valuation at this point.

I added 20 positions in OKE  on 8/06 at $34.39 in my taxable account, making up total 40 positions as of now.

It will add $48.40 of passive income on an annual basis. I consider it as a great addition to my Portfolio.

Full Disclosure: Long on above mentioned securities.

Thanks for reading.

What do you think about this buy? 

6 thoughts on “Recent Buy

  1. No doubt that stock has a very juicy yield as most energy plays do at this time and while it’s selling for about 50% less than its 52 week high I’m still cautious about entering the energy sector. It seems like it has been a giant hole for a year. Still, this is a solid pipeline play and at these levels your downside seems limited. Thanks for sharing.

    1. Hi DivHut,

      OKE is a great pipeline play and most of the energy related companies are in bear territory now. Yeah, it seems like a giant hole for sure and last fri was not exception. I take this as an opportunity to add at a bargain basement price, if you are in it for a long haul.

      Thanks for stopping as always by and commenting!

  2. Nice purchase, PIM. OKE has a fantastic yield and I like the space. Congrats on addign more to your div income stream.

    Best
    R2R

    1. Hi R2R,

      Appreciated much liking the purchase. OKE do have fantastic yield and I’ll add more if prices were to go down even further, which I see higher probability right now due to looming global slowdown, lead by emerging countries.

      Thanks for stopping by and commenting, as always!

  3. I have a few MLPs in my portfolio, but I don’t really like dealing with them at tax time. Each one seems to require different treatment.

    OKE seems like a good pickup and one can’t argue with that yield!

    1. Hi DivGro,

      MLPs are great to have it in portfolio due to high yields, in tax-free or tax-deferred accounts like IRA’s. However, it is a topic, best dealt by tax professionals. Personally, I do not put them in taxable accounts. I completely agree that dealing with tax issues, put a kind of dampener to have MLPs and that’s why I own corps like KMI and OKE and not PAA or KMP, which is defunct now anyways.

      Thanks for stopping by as always and appreciate your perspective.

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