Monday, March 24, 2014
Weekly Purchase - BP
6 shares BP, 4.91% yield, $13.68 annual income
The big news today is that my forward annual income surpassed $6,000 meaning I will be averaging $500 per month dividend income from this point forward. I don't dwell on milestones. You won't see me getting excited about my portfolio reaching some arbitrary value. But this one is significant for me. You see, I have saved at least $500 every single month for the past 6 years. Now my dividend income will start to match my own efforts ($500 per month) as I attempt to attain this thing called financial independence. Very cool!
Today I started a new position with BP plc. With a forward p/e of only 9.4, I feel BP is one of the cheapest dividend growth stocks in an otherwise heated market. 9.4 Anyways BP is an oil major based out of the UK. It's still plagued by pending lawsuits from the Deepwater Horizon spill in the Gulf of Mexico. The company seems to be situated well enough financially to weather additional costs however. This past month BP stock declined quite a bit as investors seemed to be spooked by tensions in the Ukraine. BP owns about 20% of the massive Russian oil company Rosneft. That's why.
I don't know Russian policy or what Russia will do in the future. However I can at least take advantage of the tension buying affected companies on dips that I want to own anyway. At the beginning of March BP traded around 50, now it's around 46. If it slides even further I would be happy to add more shares on weakness. Barring WWIII scenarios I feel this is the correct way to approach the tension.
I have many free trades available and did not pay commissions today. I plan to continue small weekly purchases until my supply of free trades run out.
Core Position: No
Speculative Position: No
Expectations: Steady income; 5% annual dividend growth
Automatic Sell: Frozen dividend; dividend cut
Consider Selling: Business fundamentally changes, management becomes untrustworthy, fundamentals deteriorate, wildly over valued stock price, or position fails to meet expectations