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Pasty
I’m glad you started this thread. I’ve held BP for 20 years and been happy to collect the SCRIP shares to the extent the value has increased to over £200,000. A sort of ‘invest and forget’ strategy. Prompted by your question and other incoming posts I will split this to 50/50, BP/Shell.
I looked at the recent stuff on BP’s website and found it quite difficult to understand who is accountable, what it will cost and when it will be delivered. Fuzzy and vague. For example, in the group below, who is accountable for finding costs, allocation of project investment and so on? No geoscientists in sight.
https://www.bp.com/en/global/corporate/who-we-are/reimagining-energy/reinventing-bp.html
Oil and Gas is quite a simple business and Shell and ExxonMobil know that. In fact these two companies rely less on ‘celebrity’ leaders and more on established systems and procedures developed over more than a century. Investors are backing a reliable brand like Mercedes or Audi rather than a new fangled BP jalopy - a rundown, beat-up, falling apart car that needs to be replaced.
Only a year ago Looney put his name to the BHP deal;
HOUSTON – BP has completed the $10.5 billion acquisition of BHP’s U.S. unconventional assets in a landmark deal that will significantly upgrade BP’s U.S. onshore oil and gas portfolio and help drive long-term growth.
The acquisition – which was announced in July and closed as scheduled on October 31– adds oil and gas production of 190,000 barrels of oil equivalent per day (boe/d) and 4.6 billion oil equivalent barrels (boe) of discovered resources in the liquids-rich regions of the Permian and Eagle Ford basins in Texas and in the Haynesville natural gas basin in East Texas and Louisiana.
Following integration, the transaction will be accretive to earnings, is estimated to generate more than $350 million of annual pre-tax synergies and is expected to boost Upstream pre-tax free cash flow by $1 billion, to $14-15 billion in 2021.
“By every measure, this is a transformational deal for our Lower 48 business. It is an important step in our strategy of growing value in Upstream and a world-class addition to BP’s global portfolio,” said Bernard Looney, BP’s Upstream chief executive. “We look forward now to safely integrating these great assets into our business and are excited about the potential they have for delivering growth well into the next decade.”
Takingmytime
Yes, thank you.. I'll check out that sector.
BP share price dipping away a touch and no hurry to invest as next exdividend date isn't until May.
@pastyc, might want to consider housebuilders. Always makes sense to invest in companies that make things of which there is a shortage. I didn't see you mention that sector and there's dividends to be had if you are looking for income investing, as well. I'm in PSN and it's been flying ever since the Boris bounce.
Pastyc.all tbe best and good luck
One stock drops big hit but 5 FTSE stocks less of a burn ie GSK...UU...BP....RIO ...PRU... just examples mind not investing advice you make your own mind up what you buy
FRTEB
Thank you once again for your thoughts and guidance.
I'm sort of reluctant to buy 5x20k stocks as you can bet your bottom dollar one or two of them will tank.. like PFG did for me
I also want to stick to FTSE 100 companies as have also had my fingers burnt with FTSE 250 and AIM markets in the past.
HSBC is attractive but it's in the financial sector, which I hold Lloyds.
IMB are another interesting possiblity, but their current dividend yield is unsustainable.
I'll certainly monitor the BP and Shell share prices over coming weeks, especially now both have just gone ex dividend. Perhaps they'll be further weakness and I can get in at a more advantageous entry point.
Thanks again everyone.
Shell vs BP shell edges it.. but I have BP ...£100k if this is all your investment you have and you want income then dont shove it in one trick ponies ie oil diversify say five good divi companies £20k each shortens your risk although it wont help in a market crash hence good divi stocks itll help you through the lows have patience on your buys too or dont buy at the top
Hi pastyc
RDSB is one of my largest holdings. I've traded it on and off over the years but eventually ended up with a sizeable holding at an average price I could live with. BP - I just bought two tranches as a long term buy and hold. Both companies will eventually transition to green(er) energy but I don't think the path is as clear as some make out. Will it be 100% electric (I doubt it) or will hydrogen play a part as it already does in Japan. Could be a bit like Betamax vs VHS! Either way, oil isn't going away any time soon. Both companies are here to stay - notwithstanding any disasters...
I also hold LLOY (+HSBA), PFG (Provident) and AV (+ LGEN, DLG, HSTG and LRE to name a few others). I also invest for income and although quarterly dividends are good, in practice with a reasonable number of holdings it doesn't really matter but you'd have to assess your own portfolio to look at the overall dividend schedule throughout the year.
Your Provident holding illustrates the point of not putting too much into any single company. No matter how good you are at stock picking, there will always be the odd munter. I don't worry as long as the portfolio as a whole is doing well (which fortunately it is). FWIW I think PFG's troubles are behind them (famous last words, I know...) and the SP seems to be gradually recovering, as will the dividend I think in due course.
Have you also considered the renewable sector? I have holdings in BSIF, TRIG, JLEN (all bought a long time ago) and GRID (bought recently). All offer good yields and several have an element of index-linking of the income = YOY increasing dividends. Most are trading at a premium though (they're investment trusts). I also have my eye on FSFL and NESF...
FRETB..
Thanks for taking the trouble to answer.
I have a large ISH holding in Lloyds and unfortunately PFS which has nosedived in the last 2/3 years.. total investment about 90k... Lloyds produces a reasonable dividend, so happy to hold. PFS (Provident Financial Services) are a VERY long term hold! ??...
The insurance sector is another I've looked at, AV in particular.. who pay a good dividend.
But I'm really tempted with Shell/BP, such huge companies which pay top dividends, and like the quarterly income idea too.
Thanks.
I would echo the sentiment in the previous replies regarding splitting the 100K 50/50 between BP and RDSB (assuming you're in the UK where RDSB makes more sense than RDSA). Disclosure - I hold BP and RDSB, amongst others.
However, is this 100K the sum total of your investment portfolio or new money being added to an existing portfolio? I ask as I would be reluctant to put more than say 6% into any single investment (maybe a tad more for the ultra-large caps, but not much more).
My portfolio is well into six figures and I currently have 56 different holdings (down from 70+ a year or so ago). Diversification is key to protect your wealth - glad I didn't have 50% of my portfolio invested in BP when Macondo blew in 2010 and the share price halved, or 50% in Enron... I did have a holding in Carillion when they went bust. I frowned, gritted my teeth and cursed, but I didn't lose any sleep. We live in an uncertain world - anything can (and often does) happen - so rule number one - Don't Lose Money (or at least try not to).
Both BP and RDSB look good value to me at present prices, but that's not to say they won't be much cheaper next week or for that matter much more expensive. With 100K burning a hole in my pocket I'd resist the temptation to blow it all in one go. Instead I'd be buying in tranches to try to average out the inevitable ups and downs.
Bear in mind anything you read on any discussion forum cannot be taken as financial advice - you must either make your own decisions (and accept responsibility for them) or seek professional advice.
Good luck, and please let us know how you proceed.
Exploration..
No, I want the cash income.
If you don’t need the cash dividend there is another advantage to holding Shell.
BP recently terminated its SCRIP scheme where you receive new shares instead of cash. These new shares are issued and no brokerage or stamp duty is payable. The alternative is a DRIP option allowing shareholders to buy new shares by re-investing their cash dividend. These shares are usually purchased at a very competitive commission rate. Stamp duty is payable on the purchase.
Shell has retained their SCRIP scheme.
Exploration..
Shell do seem the better forward thinking Company of the two.
The dividend is my main priority as I'm happy to leave the investment in long term..my 100k will return circa £7500 pa, so that would be a fantastic return say in 10 years?
Exploration..
The size and what seems better future planning by Shell did make me think putting all of the investment into them...my main priority is the dividend, as I'm quite content to have a 10 year plan.. my 100k would give me circa£7500
exploration. Good post there, my oillie holding is weighted more in favour of rdsb based on similar reasonings (as well as a bit of long term holdings bias) . But as a new investor id be 50/50.
In general Shell has always been a few steps ahead of BP, especially when BP’s interests in Iraq, Iran and Nigeria were ‘nationalised’ in the 1960s/1970s. Had it not been for the discovery of Forties and Prudhoe Bay BP might have vanished in the early 1970s.
Also, Shell is bigger than BP and more diversified geographically so resistant to ‘local’ political problems. Shell’s ‘energy transition’ plans are more realistic (50% reduction in carbon emissions by 2050) as opposed to BP’s 100%). Shell explains their plans on how it will be achieved in their annual report - altogether a more integrated approach than BP which seems to be panicking. The slogan “you can be sure of Shell” really does mean something.
Exploration..
Yes, I've thought of that option...Shell has a slightly better yield currently, but not a lot in it!
Thanks for your advice.
i would split it also, neither is more attractive than the other at present.
Pastyc
Shell reached a 52-week low on 14th February.
Put 50k in Shell and 50k in BP
Jakers..
Many thanks.
If it was my 100k I would probably opt for BP mainly because the current share price is very close to the 12 month low and a very good entry price in my view. best of luck with your investment
I've 100k to invest in either Shell or BP.. Dividend growth / securityis my priority... views?