No CNBC - That Isn’t How Dividend Stocks Work

Indexé : 2026-05-16

[00:00:01]No, CNBC. This is not how dividends work. And I can't say I'm surprised that you guys don't get this given that I do believe you employ Jumping Jim Kramer who wanted to force the military into our houses to give us jabies. All right.

[00:00:18]So, I read this article the yesterday from CNBC about the puny dividend yield of Exxon and how you could uh how Exxon shareholders can generate more income now that the dividend yield is so low. I said this might be one of the most idiotic investment uh topics I've ever seen. I I was stunned by this that CNBC would write such a literally piece of stupidity. All right, so let's say I bought Exxon in 2015, 10 years ago.

[00:00:47]Exxon was trading at 50 bucks a share at a dividend a payout of 250. All right.

[00:00:53]So if we had a dividend payout, I was actually getting $2.50 per share I had and I paid 50 bucks for that. That meant my dividend yield was 5%. All right.

[00:01:07]Now we fast forward. Exxon is paying roughly, we'll just say $5 a share as a dividend payout. Five bucks a share. I don't think it's quite that high, but just it's easier to do these numbers.

[00:01:19]Now, the price of Exxon Mobile is 150.

[00:01:23]All right. So, Exon Mobile is paying five was paying $5 a share. The price is 150, whatever that is. That a 3% dividend yield, something like that. So, the dividend yield has gone down.

[00:01:37]The price per share has gone up. The price per share has tripled. The dividend yield has gone down. But my dividend itself has doubled. I used to get a $2.50 dividend. Now I'm getting a $5 per share dividend.

[00:01:52]All right. Has my dividend yield gone down? No, mine has not because I bought Exxon at 50. So the price of Exxon Mobile in terms of getting today is irrelevant to me. The only thing that's relevant is what is currently paying as a dividend and what I paid for it initially.

[00:02:16]So right now what's called a yield to cost.

[00:02:20]I'm getting $5 a share dividend on what cost me 50 bucks a share. Five divide by 50 is a 10% dividend yield to cost.

[00:02:33]It matters not what the current dividend is unless I'm buying more shares. Now, you can make an argument that if I'm reinvesting shares, that does factor in my reinvested shares. I grant you, but by and what by and large, well, not by and large, but the facts are my reinvested shares are minuscule compared to my how much I actually bought my round lo shares of 100 or my all shares of 82, whatever.

[00:02:58]So, the fact that CNBC doesn't get this boggles my mind. So, what they're saying is to generate more income from Exxon is you should basically sell covered calls and offset by buying puts. And I'm like, what? Because they're saying you're only getting a 2.87% yield right now, whereas before the price was still low, you're getting 5% yield. I'm like, but if you already own the shares, that the current yield is irrelevant.

[00:03:27]How do people not get this?

[00:03:29]I bought my Exxon uh 10 years ago. It paid me $2.50 per share. I bought a 100 shares at 50 bucks a pop. Fast forward till today, I'm getting $5 a share on my dividends on my Exon Mobile stock. My dividends have gone up by 100% or 7.2% annualized from 10 years ago to now.

[00:03:57]My yield isn't a yield today. My current dividend yield is irrelevant today because it's relevant to what I purchase my price my shares for. The only reason it's relevant today is what someone new buying the shares would get. And the fact that this article did not make the distinction between an old shareholder and a new shareholder, it's just bad just bad financial journalism, which doesn't shock me in the least. And I'm just like, dude, how do you not get this, man? I I literally don't understand how you don't get this.

[00:04:29]Especially if your argument is you should sell covered calls and buy put options to generate some income and have a four as well. I'm like, okay, but if you already own the shares, that's that's not applicable to you because you're already getting again a 10% yield to cost anyway. All right, God bless.

[00:04:46]Would not expect much more from financial journalists.