Out Fox The $treet

Exxon Mobil continues to boost net debt levels in order to pay massive dividends. The energy giant continues to cut investing in the future in order to pay an 8.3% yield while watching the stock collapse. The stock isn't investable until the company cuts the dividend at least 50% similar to BP. After another quarter of massive amounts of cash exiting the balance sheet in favor of debt,  Exxon Mobil  ( XOM ) investors should want the energy giant to consider cutting the dividend. The biggest issue is that the company can't afford to correctly invest in the future with the massive dividend overhang. My  negative investment thesis  continues to project the stock having less value due to $15 billion in annual payouts causing irrational asset sales and volatile capital spending decisions that hurt investors. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please read the disclaimer page for more details. 

The New Dogs of the Dow had a solid Q1 gain that surpassed the benchmark Dow. The average stock in the Net Payout Yields based list had a yield of 9.2% to start Q2. Due to a large buyback, United Technologies overtook the lead with the highest yield at 13.1%. This article will focus on the quarterly returns and changes in the new "Dogs of the Dow" strategy originally introduced (see  The New Dogs Of The Dow - 2015 ) last January. The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated. The more modern version involves using the Net Payout Yield (NPY) that adds the net stock buyback yield to the dividend yield. This yield more accurately reflects the modern corporate structure that utilizes a large amount of stock buybacks. Read the full article on Seeking Alpha.  Disclosure: Long AAPL, CAT, IBM, TRV. Please read the disclaimer page for more details.

Summary The New Dogs of the Dow had Q2 returns that exceeded the gains of the DJIA, but it failed to match the rebound of the Dogs of Dow theory. The average stock in the Net Payout Yields based list has a yield of 8.3% starting Q3. After a large loss in Q2, Travelers tops the list with a 12.3% yield.    This article will focus on the quarterly returns and changes in the new "Dogs of the Dow" strategy originally introduced (see The New Dogs Of The Dow - 2015 ) back in January. The goal of the series is to highlight that the old theory of buying the Dow stocks with the highest dividend yields is outdated. The more modern version involves using the Net Payout Yield (NPY) that adds the net stock buyback yield to the dividend yield. This yield more accurately reflects the modern corporate structure that utilizes a large amount of stock buybacks. Read the full article on Seeking Alpha .   Disclosure: Long AAPL, CAT, IBM, T...

The first quarter earnings report from Chevron Corporation ( NYSE: CVX     ) again highlights the lack of production growth from the majors. The oil major continues to obtain the majority of its profits from projects around the globe while domestic energy production soars. The results are similar to those produced by ExxonMobil Corporation ( NYSE: XOM     ) , which sits virtually in the middle of the energy explosion in Texas but has widely missed out. Both companies' shares remain cheap at around 11 times forward earnings; this is especially cheap in a market that a lot of analysts consider expensive. Read the full article here . Disclosure: No positions mentioned. Please read the disclaimer page for more details.

With a subsidiary of Cheniere Energy ( LNG ) announcing the signing of another long-term supply contract, the stock has become overheated with a RSI approaching 80. Investors need to be concerned that the newest deal won't lead to sales until 2018 at the earliest and could face a block by the federal government. The company plans to be one of the leading domestic LNG exporters. It owns a 61% interest in Cheniere Energy Partners, L.P. ( CQP ) , which owns the Sabine Pass facilities. Cheniere Energy Partners plans to construct six natural gas liquefaction trains that are in various stages of development to produce a total of 27 mmtpa. Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Over the last few years, ConocoPhillips (NYSE: COP ) was a huge buyer of its own stock. Unfortunately for investors the company has suddenly stopped buying the stock over the last two quarters. Should investors hold onto the stock if the company isn’t buying any more? After the spin-off of the refining business, Phillips 66 , last year, the company is now a leading independent oil and gas producer. The stock more » Disclosure: Long COP. Please review the disclaimer page for more details. 

On Monday, Seadrill (SDRL) highlighted on the Q2 earnings call that deepwater drilling remains a very hot sector with limited available rigs for the next couple of years. This was a theme highlighted at the beginning of the year as drilling in the Gulf of Mexico had picked back up. The company provides offshore drilling services to the oil and gas industry worldwide. Its services include drilling, completion, and maintenance of offshore wells; production drilling and well maintenance; and well services. The company owns a fleet of offshore rigs and has 18 new builds under construction. While the adjusted earnings slightly missed estimates, Seadrill continues to see huge demand for its rigs and tightness in the market for the next few years. The company has one of the youngest fleets in the industry and continues to benefit from an aggressive new build program. Read the full article at Seeking Alpha. Disclosure: Long ATW. Please review the disclaimer page for more details.

As the US shale boom produces a bounty of dry gas and now even oil, the promises of a shale gas revolution in Europe and China is fading quickly. It may still happen, but it might take a decade to develop different techniques as the methods that worked in the US clearly aren't going to work in places such as Poland where population density and harder rocks make it a more complex and costly endeavor. The shale boom had great promise in helping Poland and the rest of Europe lessen dependence on expensive Russian supplies. Instead, the Polish Geological Institute recently cut the estimated gas reserves by 85 percent. Now before even starting, major US corporations like Exxon Mobil (XOM), Chevron Corp (CVX) and ConocoPhillips (COP) are faced with doubts about whether the drilling will ever be feasible even if the gas does exist. This is a far cry from the scenario in the US where the technologies have already proven. Read full article at Seeking Alpha. Disclosure: Long COP. Pleas...

With the crazy market of the last year, it's been difficult to focus on the Net Payout Yield stocks in our portfolios. The Net Payout Yield is the combination of the payout from a dividend and any stock buyback divided by the market cap of a stock. A lot of mutual funds, ETFs, and advisors focus on the values of investing in dividends, but not many focus on companies that buyback stock. Stock buybacks are more efficient ways for increasing the value of your portfolio, but more people seem to like getting the cash directly even if its less tax efficient. While getting cash can be important to clients, the total return usually rules investment decisions and the Net Payout Yield has proven to be a much better investing philosophy. Unfortunately this last year has made it difficult to pick such companies with so many of them cutting back stock buybacks to conserve liquidity and many financials eliminating dividends. One of the better investments in our Net Payout Yield portfolio has b...