Time To Bail On PetroChina?
I just sold half my stake in PetroChina(PTR). Actually I put the order in over the weekend and forgot about it. When I bought PTR, the dividend yield was 4.85%, which is more than you get in most bank CD’s. Since the whopping 130%+ run-up in price, the dividend yield has dropped to a mediocre 2.30%.
My first and foremost goal, when it comes to investing, is to get a good dividend yield. Most of my portfolio consists of high-yielding Canadian income funds (Canroys) and is heavily weighted towards oil & gas and mining companies.
Since there’s a lot of excitement surrounding PTR’s Chinese IPO, there’s a good chance that it can rise even higher. However, if the dividend yield doesn’t keep up, it might be a signal that the valuation is becoming too rich. Of course, if the market considers it a growth stock instead of a value stock, it deserves a low yield ( and high PE ratio). However, PTR is already the world 2nd largest company. How much more can it grow?
Will it double from here and become the world first Trillion Dollar Company? I don’t know. But I don’t think so. I’d rather take my profits and invest them in a company which has a better chance of doubling.
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October 23rd, 2007 at 9:04 pm
Buffett got out.
October 23rd, 2007 at 9:50 pm
Yes, and his track record beats mine hands down!
October 24th, 2007 at 1:24 am
You’re right on the money with PTR.. It’s time to bail as the chances of becoming much larger than XOM are slim.. I’d move as Buffett moves.. Although he said that he left a lot of money on the table, he has to cuz he can’t just sell $3.5 billion with a mouse-click..
What’s surprising is that the Chinese government owns 88% of PTR.. that’s $400 billion for the Chinese government on top of the trillions they have in reserves!
November 8th, 2008 at 7:32 am
I bought shares of PTR on 12-22-2000 at 16.25 per share, of which had a dividend yield of just over 4%. Today, the dividend yield on those year 2000 dollars is 25+%, thus i’ll continue to hold. I’ve been investing in oil stocks for over 40 years because of the consistent growth of dividends within the sector. I continue to hold big oil, oilsand, pipeline, natural gas, services, producers, refiners, because i believe that the price of oil and gas will continue to rise over the long haul. Commodity prices dropped for the election, yet will go back up and we’ll see oil back up into the 80’s and 90’s thru year 2009. Have a nice day!
November 9th, 2008 at 7:15 pm
congratulations – i wish I had bought at that price!
unfortunately i bought at over $100, so I got out when the going was good.