RE: Divi26 Jul 2022 15:31
meoryou – here’s my comments to the 2 points / questions you raise
1/ why did I buy BP? – nothing particularly scientific I’m afraid. I’d held Shell for many years with an average buy price of around £16 per share. I simply sold some Shell at £21+ and moved it across to BP to provide some diversification ie less likely that 2 companies would suffer some catastrophe rather than one.
Both offered a similar dividend yield of around 6.0%+. The BP price at the time of £4.50 looked ok and the dividend looked safe. My initial purchase was made in April 2017.
2/ what does the market like a damn site less now than 30 months ago? – I believe that the market has rerated BP so the old £5.00 share price level is now £3.50 ish (maybe less). At a macro level the market has recognised that demand for the primary product, and associated revenue and profit, will decline over the long term. At a more local level I think the fact BP have stated they’ll reduce output by 40% over the next 8 years, whilst providing no tangible forecasts to the investment costs, revenue and profit generation, of the renewable energy that’s supposedly the future of the business.
Today’s share price seems to be heavily supported by the oil price. I recognise the sp has always reacted to movement in the oil price but it just seems so reliant at present on a $100ish oil price.
I’m sitting tight at the moment but, as I’ve said before, I fear for the share price when, not if, the price of oil retracts to a more ‘normal’ level. I can see the BP sp retracting to £3.25 to £3.50 range when that happens.
Hope the above helps clarify my thoughts and comments. They're simply my opinion, nothing more!
Good Luck.
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