Updated: October 27, 2015
This time last year, crude oil was selling for more than $90 per barrel. Today it’s half that, and yield hunters are excitedly sorting through the spill in oil stocks. Stalwarts like Chevron (CVX), Exxon Mobil (XOM), and BP plc (BP) are paying 5.6%, 4%, and 7.8% respectively. At first glance, these look like great deals from reliable dividend payers. Unfortunately, these “yield bargains” are likely to cost you a few times more than you’ll earn in payouts.
No matter how well these companies run themselves, the actual price of oil is outside of their control. And when the goo is in freefall, their stock prices get drilled.… Read more