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Gas still going up.
The central banks are causing the mother of all asset bubbles here. Literally everything is surging, base metals, oil, precious metals, crytpos, emerging market currencies, even unloved gas up again today to around a 7 month high.
Prices are up 50% from the June low of around $1.50!!
BBOX is another share I own which I see as having similar qualities to DGOC. A huge SP rise from the depth of covid has meant its yield has compressed from over 10% to around 4% given its relative immunity from covid.
The same thing could easily happen to DGOC. A reliable dividend stream is becoming very highly valued and the current surge in prices will give DGOC a chance to lock in prices for future production which will support the dividend.
The divi chasers usually push it up to 108 to 110. A sustained higher gas price might help keep it there. At some point it's got to start heading towards 150 IMO.
I currently focus more on capital returns than dividends. Ironically maybe given this is an income stock. But I think the SP will chase the dividend yield and FCF yield down to a more reasonable level.
In the current price basket, the dividend yield to me, after exchange rates and WHT is 9%. I think a reasonable yield is 6%, which would give 140p. I would sell somewhere around there if there were other opportunities. But if I was looking for a steady dividend stream I would be looking at 180p, which is a 5%.
Mrg123, I’m not looking to sell anytime soon from now. I’m thinking 3-5 years. I’m not selling lower than 200p and will enjoy the great dividend yield in those years to come as well. Gas is needed for many more years and I believe they think the need for gas will increase till 2035.
@ Timchecco & ragnarlothbrok What price would you sell at?
They have made it hard for themselves with a name that includes 'diversified' and 'oil'. There is nothing diversified about it and oil is only ~5% of revenue. Investors are looking for growth now which means DGOC just isn't that appealing to many
It's weird how DGOC SP generally climbs when oil price increases rather than gas. I don't think many investors realise its mostly a gas company.
10% divi cannot be ignored. Especially from a company that makes a good profit and has a clear and sensible plan for the future. Once the markets settle down and people stop chasing a quick profit, I believe they will invest heavily into DGOC.
Good spot MrG. NG prices up 16% today!! Some shorts are getting burnt. And more importantly for DGOC, the forward price curve, from which all of DGOCs revenue is fixed to, has also shown significant improvement over the last few weeks. So this would be one of those times when DGOC is opportunistically hedging future production.
https://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html
I took a lot of DGOC from the table in the pursuit of rainbows but still hold a decent amount for the relatively stable dividend. Not many around which can boast a 10%+ quarterly yield unaffected by covid. Really should be much higher but this market just isn't exciting anyone at the moment.
DGOC is my biggest holding and I’m not anywhere near selling the next couple of years! Dividend combined with expected increase of shareprice makes it a great investment if you ask me.
Gas is needed for a while and it is the great ‘in between’ step between coal and solar/wind energy.
Nice climb on the gas price. Hopefully the start of a true recovery.