I've collected my dividend so now it's time to sell stock pick Total out of my dividend income portfolio

06/27/2013 6:30 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

On May 31 I wrote http://jubakpicks.com/2013/05/31/sell-stock-pick-total-out-of-my-dividend-portfolio-but-not-quite-yet/ that I would sell shares of Total (TOT) out of my Dividend Income portfolio but not quite yet. (The sell decision was based on the downward trend in oil prices and the fact that Total was in a capital spending phase that wouldn’t turn into cash flow until 2014. You can see more details on that argument in my post.) I decided to wait to sell until the company had paid its next dividend on June 24. (The stock went ex-dividend on June 24 and the dividend is scheduled to be paid today, June 27, to shareholders of record.)

I got a number of comments suggesting that I should sell now since the market seemed to be headed for a drop (absolutely right, as it turned out) and others noting that stock prices drop by the amount of the dividend payout after the payout so why hang around. For what is a dividend income portfolio I chose to hold on to collect my cash, however, since generating income is a big part of the goal of this portfolio http://jubakpicks.com/

So how did my decision to wait to sell until after the dividend payout work?

The shares closed at $49.85 on May 31 and after the bounce of the last few days they closed today, June 27, at $48.48 as of 3 p.m. New York time. The dividend payout today is .59 euros, or 77 cents at today’s exchange rate. By waiting to sell I lost 60 cents a share.

The gain on these shares was 3.24% from my purchase price on May 28, 2010. At the time of purchase the stock paid a yield of 6.5%.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. When in 2010 I started the mutual fund I manage, Jubak Global Equity Fund http://jubakfund.com/ , I liquidated all my individual stock holdings and put the money into the fund. The fund did not own shares of Total as of the end of March. For a full list of the stocks in the fund as of the end of March see the fund’s portfolio at http://jubakfund.com/about-the-fund/holdings/
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