Woodside, page-385

I really enjoy Red Dirt Dan's posts on Woodside and other stocks here -- thanks for your thoughts, mate.

In 2020 I was heavily overweight WPL in the mid-to-high teens, and the Betashares FUEL ETF. I sold probably 80% of both last year for a nice profit and kept greedily hanging on to Woodside at $37, then regretted not selling (along with everyone else!) when it went back to $31. To be honest I've tried to avoid looking at too much. I kept 20% of FUEL and 20% of the original WDS (WPL) holding from mid-2020.

Woodside has certainly fallen a long way, as has the oil price. Maybe there are company-specific reasons I haven't been across. As mentioned, I have deliberately tried to avoid getting caught up in the emotion of 'should I have sold last year?' or 'should I have sold the remaining 20% at $37'. Of course it was going to $40 when it was at $37. Yeah, right...!

Yesterday I took action. FUEL is gone; and so close to the distribution date -- very unlike me. I am very surprised to have sold it for $6.21. A great price considering where oil is trading. Profit taken. The first stock sale this financial year. I am not good at selling shares I hold.

I put a third of the money straight into WDS to top-up my holding, and will keep the remaining 2/3rds to buy more WDS (or other stocks) on any further weakness. If it goes to $38 soon, so be it. If it goes to $27-odd, I'll deploy another third.

To my surprise, the Woodside forward dividend is around 7.3% PLUS franking credits (no franking credits on FUEL and a lower dividend). And Woodside is at 12 month lows, at the bottom of its trading range. You need to go back to 2021 to see such a gap between FUEL (tracking Chevron, Exxon, BP, Shell, etc.) and Woodside. I haven't followed the company as close as I should have (actively avoiding it!) but for exposure to a rising oil price, Woodside seems a no-brainer. Maybe the ETF is holding up so well due to exuberance in US stocks in general. If the US market falls, perhaps oil stocks will fall too, whereas Woodside has already had a lot of downside factored in. All things being equal, we seem to be very cheap in comparison with our global peers. I woke up yesterday thinking 'why would I be holding FUEL when I can buy WDS much cheaper and with a higher dividend plus the franking credits'. Easy decision made.