Question for longtime BP investors (dividend related)
I am thinking about taking a position in BP. I will say up front I am a dividend investor and that's basically the sole reason I'm looking at BP. COP is my biggest position in energy, but I'm looking to diversify a little.
Do you feel BP is a company that long-term 10-15+ years out will still be paying a compelling dividend? Is it something that's important to management?
I myself am a dividend investor. I bought BP a quarter before the spill and foolishly doubled down and news broke on the spill, the success of the top kill. Oh well still holding. But what I did learn that BP is many peoples retirement program in Britain so I'm confident that in time it will return or surpass its .84 dividend when I originally purchased.
as a dividend investor, the timing could not be better for you. stock price, as the denominator, has decreased and is deflated by current litigation. the numerator to for dividends/share price shouldn't change. do not expect PPS to go much lower. i don't think dividends will be increased any time soon as settlement/award costs are yet to be realized. however, yield is great right now and once PPS goes back up, yield will drop. your dividend "interest" will always be predicated against what you paid, not what current PPS is. in other words, unless dividend is decreased, and that shouldn't happen, you lock the rate when you buy at current under inflated stock price. oh yeah. go for it. even if PPS drops 10% you will be running at a yield of 5.4%. that is great no matter how you look at it. i too am into BP for the dividends but won't increase my holdings as BP accounts for 16.3% of my stock portfolio. so, in my estimation, i am all in. oh yeah, the only time dividends were lowered was after the spill. as Upton1free says, do your due diligence.
It is a great stock, with a great div. which will get better after the trial is over. Take a look at EROC if you like the energy sector. Pays about a 10% div. also PWE which sells for under $10 but it's book value is $18.+. Hugh reserves in oil and gas. Do your own DD. LOL