Total (TOT) is a high dividend stock now, but wait for oil to bottom before purchase.

Total (TOT) is now a high dividend stock thanks to the recent worldwide stock market crash and oil’s price plunge.  Total peaked back in May 2011 at $64.44.  The stock has fallen 27.9% since May to $46.42 today.  I wrote an article on June 23rd, 2011 on Total that had all my typical measurements of dividend record, earning power, and strength of balance sheet metrics.  Here is a quick recap: today’s dividend yield is 6.9% and is relatively safe, it earned an average of $4.64 per share (adjusted) over the past five years making it a value below $55.68, and it has a good balance sheet.

Click here for the June 23rd article:

This stock is a buy for its combined high dividend, earning power, and strong balance sheet.  But the fundamentals of oil are short term bearish.  The global economy never really recovered since the Panic of 2008.  Keynesian money printing and massive government deficits have only made things worse.  When worldwide investors slowly realize that there is no recovery the price of oil will tank.  Total will be dragged down by the drop in oil.  The dividend yield will become bigger as its stock price declines.  I think that Total could drop all the way back down to $36.82 like it did during the Panic of 2008 especially if oil drops to the $40-$50 range per barrel.


Link to this chart:

Look at oil’s hammering.  Oil’s fundamentals trump Total’s.  Wait to buy until oil is done going down.  Put Total (TOT) on your watchlist.


Disclosure: I don’t own Total (TOT) yet.

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Published in: on August 11, 2011 at 4:55 pm  Leave a Comment  

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