Recent Buy - Dividend Growth Investing

Hello everyone,

I made a new purchase in my ongoing, yet slow going, building of my investment portfolio.  I’ve been saving additional capital, on top of my usual weekly/monthly buys, to invest in larger amounts in some companies I consider valued attractively.  Unfortunately, the market has been on a roll since I’ve saved the additional cash, so I’ve been patiently waiting and evaluating my options.  I have been investing in the energy sector, with my ongoing purchases in ExxonMobil (XOM) and ConocoPhillips (COP), but I felt the continual drop of oil prices of late has led to even more value in the sector, so I pulled the trigger on another purchase of one of the “Big Oil” heavyweights.  This company is riskier that XOM and CVX, but I believe it is valued attractively at the current trading levels with a very nice Yield on Cost (YOC) and forward P/E.  Without further ado, I initiated a small position in BP.

 
Summary of BP:
 
BP PLC provides energy products and services. The Company is the parent company of the BP group of companies. The Company has two main operating segments, Upstream and Downstream. Its upstream segment manages exploration, development and production activities through global functions with specialist areas of expertise. Its downstream segment operates hydrocarbon value chains covering three main businesses - fuels, lubricants and petrochemicals. has operations in around 80 countries. The Company manufactures and markets lubricants and related products and services directly in about 45 countries and use approved local distributors for other geographies. Its fuels business is made up of regionally based integrated fuels value chains, which include refineries and fuels marketing businesses together with global oil supply and trading activities. The Company supplies fuel and related convenience services to consumers at approximately 17,800 BP-branded retail sites and have operations in almost 50 countries.

Meat and Potatoes:

On November 12^th, I bought 22 shares of BP at a share price of $41.25 for a total cost basis of $907.50.  At the purchase price of $41.25 and an annual dividend of $2.40, this makes my Yield on Cost (YOC) a very nice 5.82%.  This adds $52.80 to my forward annual dividend income that now sits at $222.86, which surpasses my goal of $200 for 2014!! 

The price of BP has been hammered as of late, as you can see in the 6m chart below.  It was trading in the $50s within the past six months, but the drop in oil prices and ongoing litigation have negatively affected the share price.  This presented an attractive starting point for me to initiate a small position.  I plan on keeping BP a smaller position within my overall portfolio, but felt the timing was right to buy. 


Any thoughts on BP?  I’ve noticed a few fellow bloggers adding to their positions lately.