Purchase of More BP

On November 10th I found myself with about $2000 that was burning a hole in my pocket. While I have a lot of companies that are on my watchlist and would love to own, I instead decided to purchase shares of a company that I already own.

I originally bought BP back almost a year ago (October 2013). At that time, BP was selling at just over $42/share. I bought a little over $2000 at that time and have since received about $117 in dividends, which I reinvested back into the company. This amounted to receiving about 5.5% of my original investment back in about a year…pretty good if you ask me.

In fact, I’ve reinvested the dividends into partial shares at up to a highest point of $50.90 per share in June 2014. While most of the market has continued to set record highs, BP has bucked that trend. I was fortunate enough to purchase 47 shares at $41.86 per share.

BP might be lower due to any number of reasons: continued threat of pending litigation, troubles in Russia, etc. However, I’m in for the long haul and more than willing to take that risk. I’m just thrilled that I was able to add to my ownership at such a great value and even lower my cost basis in the process.

There’s a good Seeking Alpha article on BP here: BP: For Income Investors, It Pays To Look Past Russian Fears And The Gulf Spill

This BP purchase has an initial yield of 5.75%. It will add $125.85 to my annual dividends. Unfortunately, I purchased it slightly too late to miss the final dividend distribution in December.

My forward 12-month dividends are now $2,870.97 ($239.25/month). Last October I was only at $1,566 annually ($130.50/month). It is amazing what the power of dividend increases and continued investment can do!

Company Symbol Shares Price Yield Expected Annual Dividend
British Petroleum BP 47 $41.86 5.75% $125.85

Full disclosure: Long BP

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4 Responses

  1. Good work, Scott! I was in the same boat and averaged down on BP myself today. I bought it much higher in August, so am very glad to take advantage here. Those forward dividends of your are showing some serious year over year power and I can’t wait to see it take off even more!

    Best,
    Ryan
    Ryan @ My Dividend Growth recently posted…I Added More Shares Of This Energy Company:My Profile

    • scott says:

      Thanks, Ryan! Despite the market as a whole being up, there are still a few gems out there, like BP, that are still a good value. Nice job breaking $1200 forward 12-month dividends!

  2. Nice job cashing in on the still depressed price. BP has been a boon for dividend growth investors as the ideal market is a flat market, allowing one to really build up a position. I used to own BP back in early 2013, as the ADR nature of the stock bothered me. Given I have a bit more experience with ADRs and am more comfortable with my investment strategy, it won’t be an issue for me to consider BP for future buys. I’ll likely make at least one more purchase this month, and one or two in December, so we will see what happens!

    Also, you’re getting dangerously close to the $3k mark in forward 12-month dividends… pretty exciting!
    writing2reality recently posted…Trades – BHP Billiton (BBL) PurchaseMy Profile

    • scott says:

      W2R, thanks. Hoping to follow you and purchase some BBL for the first time early this coming week too. It’s always nice to see other people with similar methodology buying stocks just as you were thinking of buying them as well. With some upcoming purchases, I will actually just tip over the $3,000 mark in forward 12-month dividends. I think I’ll be buying them too late though for them to count towards my 2014 total.

      Looking forward to what you decide to buy next. It will be BBL, CAT (or DE), and NSRGY for me.

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