October 2016 Sitrep

stock market

October was another fruitful month in the investing world.

Visa did not disappoint, they game me a 17.9% pay rise. When was the last time your employer game you a nearly 18% pay raise for doing nothing when you didn’t even need to show up to work?

I don’t see any let up on the horizon for Visa’s continual growth as a business and expect continued long term dividend increases.

The other pay rise was from Chevron. I am normally delighted to receive pay raises, but this one I didn’t support. Even an extra four pennies per share paid out in dividends annually when you are at the bottom of a commodities cycle and bleeding money makes no sense. A much better use of these  funds would have been to pay down debt or fund capex. Even share buy backs would have been a prudent move.

Chevron has around 1.87 billion shares outstanding, multiply that by four cents a share on an annual basis and that’s how much extra they need to borrow annually to pay the dividend when they are currently losing money.

That’s not a clever way to build long term shareholder wealth.

November has already started as an outstanding month for dividend increases. I will report back in a few weeks.

Company Date Number of Shares old dividend new dividend % increase old annual new annual Amount increase
Visa 18-Oct-16 593 0.56 0.66 17.9 332.08 391.38 59.3 USD
CVX 26-Oct-16 90 4.28 4.32 0.8 385.2 388.8 3.6 USD

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