New
Dividend Growth Buy – Not BBL this time
Hello everyone!
Well, I've made my first buy of the month of December (didn't take too long). I planned on making two purchases for the
month, if feasible with available funding.
I knew I would most likely be buying an oil related stock for one of the
purchases, as I had to take advantage of the big oil drop. I missed the Black Friday drop in the oil
sector and was kicking myself the whole weekend, so I couldn't wait to pull the
trigger on Monday, if the pricing was right.
To my surprise, oil stocks have rallied for the most part this week. But, luckily, I bought first thing Monday
morning and still got a very good price, in my opinion. We will have to see where the market takes us
with the oil companies for the remainder of the year, as it is kind of shocking
for such a rally after oil has been hit so hard.
I had narrowed down my
1st choice for investment in the energy sector to BP p.l.c. (BP), as
I already actively contribute in a direct investment plan in Exxon Mobil Corp.
(XOM) and ConocoPhillips (COP). During the
past two weeks, I had made small purchases of BHP Billiton p.l.c. (BBL), so it
was hard not to add to it with a huge drop on Black Friday. But, I decided to wait and see how it plays
out before adding more BBL at this time with limited capital. In addition, I initiated a small position in
BP at the beginning of November, so I was looking to add to it soon. In that purchase, I bought 22 shares of BP at
a share price of $41.25. The Yield on
Cost (YOC) was a very nice 5.82%.
On Monday, I decided to
add to my position in BP, so I purchased 15 more shares of BP. I missed the 52 week low on Monday, but still
made the purchase at $39.60 per share, which I consider a very good value at
that price point. With that purchase
price, it provided a YOC of 6.06% with an annual dividend payment of $2.40 per
share. This new purchase brings my total
position of BP to 37 shares and lowers my cost basis to $40.58 per share.
This
week has seen a rise in the price of BP, as it was trading today up to $41.59
and closed at $41.31. Much of the rise
has been attributed to the rumor mill, as rumors were flying of a possible
merger between BP and Royal Dutch Shell p.l.c. (ADR). However, I haven’t seen anything of substance
to substantiate this claim, so we will have to see how that all plays out.
Besides my ongoing
monthly purchases, I will be looking in other places besides oil for the
remainder of the month to initiate a position, such as in the healthcare or
financial sectors, as I detailed in my Watchlist. Thanks for stopping by and please let me know
what you think of this purchase. Anyone
else pick up any oil plays this week?
Special
Agent Dividend
Hahaha, the title! Although at these levels, I wouldn't blame you if you did decide to add to BBL. :)
ReplyDeleteI'm keeping a close watch on companies in the oil & gas industry this month. Mr. Market might present us with some great sales.
Haha If I had the available capital, I would certainly add more!
DeleteGood luck with the direction you take. I plan on adding some small buys in XOM and COP this month.
Wow...a 6% dividend! Congrats on adding nearly $40 to your dividend income.
ReplyDeleteBest wishes
R2R
Thanks R2R! That 6% yield is awesome, especially on a company like BP. I'm hoping the oil decline doesnt result in any suspensions or cuts in dividends though!
DeleteI also laughed at the title. It seems that every recent buy is a BBL buy. BP is looking good to many these days as well. Have you taken a look at TOT as well? Even with a French withholding tax the yield is still very high. Happy to see names other than BBL in the buy column.
ReplyDeleteThanks for stopping by DivHut! I haven't really considered TOT, so thanks for that suggestion. I'll have to give it a look, especially if oil keeps declining!
DeleteAgent,
ReplyDeleteAwesome purchase and great way lowering your average down + increasing your projected dividends! Oil has been a hot area, obviously, as of late. I know Bert would appreciate this, as he is a fellow BP shareholder! Congrats and nice job.
-Lanny
Thanks Lanny! It was nice to lower my basis only a month later and get a YOC of 6%.. Definitely thankful for the oil drop, but still wondering how much longer it will continue.
Delete