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!
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Full disclosure: Long BP