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A few posts about Divi’s on here - Central Asia Metals (CAML) looks set to announce a dividend (I believe will be 6.5p per share ) this week or next after delaying it early in September ... in terms of bp with a slight profit this one shouldn’t be cut... GL
No. Not necessarily. Obviously if a company trades at a loss over the long-term then continuing to pay a dividend makes no sense at all. However, although BP's results show a 90% decline over the corresponding quarter in 2019 they have at least reported a small profit for the quarter of £75m. This compares to a loss of £5bn in the previous quarter. They continue to cut costs and forecast a continuing increase in sales for oil driven by a higher demand from Asia. On that basis I see no reason for a further cut to the dividend.
Looking at the link which shows forecasts for 2021 and 2022 profits are on the mend and the dividend is maintained.
https://www.marketscreener.com/quote/stock/BP-PLC-9590188/financials/
Nope, dividends are dependent on whether the company wants to pay them or not!
Are dividends not dependent on profits?
nice to think that. They said that about BT's one. Mind, the yield there was about 15% at one stage if i remember rightly.
Personally, now BP have cut the dividend by 50% I think it's safe at this level for many years to come.
yes, to be fair i've been looking at LGEN as an investment. Point is Zac there's not a lot of them about about really. There are some great potential future ones which have suspended their divis due to covid that's for sure. Personally if i knew BP would keep this level of divi for certain i would categorically hold this share for many years. Never know when they might pull it that's the concern!
Paddyboy1 "I'm not sure of any stocks at the moment offering a better divi yield than BP" . . . how about the following? All yields based on today's share purchase price: Standard Life 9.57%, Legal & General 9.46%, New City High Yield Funds 9.27%, Henderson Far East Income 7.58%, Henderson High Income 7.73% & Merchants Trust 7.69%.
The last 3 are investment trusts. Whilst they trail the current BP dividend yield they have historically increased their dividends year upon year. Merchants Trust have increased the dividend every year for 38 consecutive years. No idea how they'll perform in the future. However, if you're an income seeker investment trusts (the last 3 on the list) offer an attractive history - year on year dividend increases, investment spread across a wide range of holdings, the ability to 'squirrel away' income to be used to support dividend payments in difficult times.
Not intended as advice or a recommendation simply ideas that maybe of interest if chasing dividends is your thing. GLA.
Guess we should be grateful. BT just got rid of what was a very nice divi altogether few months back. Investors ran a mile when that happened!
So, based on the current divi and at what yield investors were prepared to hold BP prior to the Pandemic .We can expect the top end sp to be about 3.00 gpb once earnings begin to normalize and oil recovers, until some meaning progress is on the capital growth strategy. BP it seems has chosen to pay in rather than pay out it's earning.
I'm not sure of any stocks at the moment offering a better divi yield than BP. The divi was big attraction to me for this share as it's an incentive to hold long term. capital growth is important of course, but so few stocks are paying good divis now. This offers a bit of both!
Yes, what BP said is that the divi would be ''resilient at 5.25 usc'' . In other words an earnings recovery won't be used to pay higher dividends but instead be employed to pay down debt, buy back shares and facilitate the transition to green energy.
Don't forget too, the Divi is in USD so there's the exchange rate to consider. Brexit and the us election will move that a few % either way too.
I agree, during a costly transformation would not be the time to be pushing the dividend up, share buyback is a better option
lodan,I actually got that about the 6p but thought I was missing something.This is pure wishful thinking and play no parts in reality. BP will not raise the divi for a long time.
Hes saying as the price goes up they will raise the dividend from 4p to 6p per quater then to 8p etc
Still on your post so here we go-----------------------------------At the moment you are getting 8% divi on the latest price.If the sp goes up to £3 you are still getting the same % of your orginal buying price.Where is the 6p coming from?
If you managed to actually buy at 196p then your divi is 8.1% and therefore a fair bit lower than your 10% so your gulding the lily a wee bit. The next part-----''If the share price hits £3 - yields will naturally rise back towards where they were 6 months ago
- so paying a similar % of share price dividend to today would be 6p / Qtr (based on a 50% share price increase) - a 50% increase in return on your initial stake now your £1.95 pays 6p for life.'' eh? Sorry too confusing for me.
Current share price is £1.95 (ish) - paying 4p /Qtr = 16p dividend yield per year (nearly 10%)
- that's for life (while dividends remain) - regardless of the share price - you buy now at 1.95 - your return is based on cost not price at the time.
If the share price hits £3 - yields will naturally rise back towards where they were 6 months ago
- so paying a similar % of share price dividend to today would be 6p / Qtr (based on a 50% share price increase) - a 50% increase in return on your initial stake now your £1.95 pays 6p for life.
The sell and rebuy represent my own exit / re-entry levels - (accumulated previously at avg of 4.55) I sold all my BP @£5.70 and started buying back in from 4.15 down to 2.25 with my 'exit cash' - the profits from which have been eroded in the further dip to now. With a mix of what's left and new cash I set ladder buys from 2.20 down to 1.00 in increasing financial value.... so - if we hit 1.60 (say) I'm further averaging down my entry price so as to need a smaller bounce up to break even.
Either way - getting a slice of BP as 'income stock' below £2 will mean a hefty % return on that £2 if we ever attain the dizzy heights of £5.50 and 8p / Qtr again... along with the % gain in share price along the way. Basically it's a steal right now.
Hope that makes more sense.
''Think small investors will be bent further over the barrel and the pain will continue.'' WHY?. When the sp drops or rises it matters to all involved.The share does not give a jot who owns it.
Who was it that said, '' the stock market is the only place where the buyers rush for the exits every time there is a sale'' ?
Sure felt like that today.
Think small investors will be bent further over the barrel and the pain will continue. Results were ok today and it dropped, big money dont want it yet , it will fall .
''It's a no brainer from here - even with dividends cut it's still paying 10% long term.
Come back in 6 months when it's at £3 and that's a 15% return.
Sold at £5.70 and ladder buying set all the way down from £4.20 to £1 - with ever increasing amounts on each leg down.''
I find your figures rather confusing.
''(So every pensioner can feel better each time they go to fill up their car....)''
What are they going to fill up with if their pension fund managers are selling stocks yielding 8% ?