Member Info for zac0_4

" Investing in BP is a banker. It’s all about the divi not a lot of hope about capital gains . . ."

Then why not simply invest in a global equity index fund? You'll probably average 7 - 8% growth pa which is 2 - 3% pa better than you believe you'll get here . . .

or,

choose a dividend paying holding (if dividends are your thing) that, again, pays a much higher yield than BP. You can get 7.6% yield from Henderson Far East Income currently which, in monetary terms would be a 50% increase on the return on your capital from the dividends you receive here.

'I’ve held BP for several years and will continue do so. Its a great investment but not for capital gains.'

Just to add to what Bigbadbaz has stated with regards to capital loss, it hasn't been particularly good for your dividend either! In case you haven't noticed it's been cut by 50%!!

As a long term holder who has seen your capital reduce by (say) 40% and your dividend cut in half, I cannot for the life of me understand how you can say this is a 'great' investment.

I've also held BP for many years and for me this has been appalling!!

licker - "switch to XOM?"

Another oil stock would be the last place I'd invest! I'll stick around until end of q1 2022 as I still feel there's some recovery left in this stock. Although my confidence in that is diminishing on a daily basis!

Sounds very good. However, if they charge McDonald's and ebay the same amount I pay for my electricity they'll need over 1,300 projects of this size to replace the 40% reduction in oil revenue they've committed to.

That's $390bn of capital / acquisition expenditure!!

"Not sure why they even bother with BP" - maybe because we thought we were investing in an oil company!!!!

The article simply reinforces to me why the share price is where it is today.

Let's inform the market that we're reducing output by 40% over the next 8 years. In addition we're increasing spend up to $5bn pa to enter a new sector. Let's provide no figures as to the revenue and profit expectations from the transition.

And we wonder why the sp is where it is!

theluckyguy - be careful. If you look at the value of your capital today you'll enjoy a yield over the next 12months of 5.2% on it, not 7% as you say.

The one thing that the economic downturn caused by the pandemic has taught me is that investing in dividend paying holdings produces a poor total return from my investments.

I'll give my investment here another 2 quarters in order to generate some decent capital growth and if not then I'll sell and top up some of the quality holding I own.

LF Blue Whale Growth fund

EMGOMG - I agree. The certainty, with regards to a transition plan, is a 40% reduction in output over the next 8 years.

The 'unknown' is the cost and future revenue and profit of the transition. I fear the share price will stagnate until some clarity is delivered around the points above.

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lti - I don't think I am comparing chalk with cheese. For me that would be comparing an investment in APAC with one in, say, the US.

Both HFEL and Stewart APAC fund invest in the Asia Pacific region. Both look to provide positive returns to investors. One via a growing dividend along with capital appreciation, the other via capital appreciation along with a small annual dividend.

Both face the same currency headwinds.

One has delivered returns over 1 and 3 years of 5% and 4%, and the other 22% and 33%.

I remain an investor with HFEL but make no apologies questioning poor capital, and total, returns over recent times.

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. . . more risk if he increases the dividend and then has to reduce it in the next couple of years. You can forget any increase to the dividend.

As for a dividend increase having a positive impact on the share price . . . well it hasn't had much of a positive impact on Shell's share price, has it?

Currency fluctuation may well have a part to play. However, it hasn't had the same negative effect on my other far east holding - Stewart Investors Asia Pacific Leaders.

Here's total returns for 1 and 3 years - 1 year HFEL 3%, Stewart APAC Leaders 22%, 3 years HFEL 3% Stewart APAC Leaders 32%

If I look at a 5 year chart there's little to choose between them up until July 2020. Since then Stewart APAC Leaders fund has far outperformed HFEL.

licker - stating that you are reducing output by 40% over the next 8 years is not a macro economic event. How many other oil companies have put a number to reduced output over a given timescale?

I like the analogy of a 'dumpy' screwdriver in a tool box! Very good.

Whilst I accept that share prices fluctuate both up and down this is probably one of my worst performers over the last 18 months or so when compared to my 21 other holdings.

Everything fell in q1 2020. Most have recovered or are on the road to recovery. This isn't. Its share price is still 18% down when compared to its q1 2020 high of £3.74. It's still 10% behind where it was in July last year, right in the middle of the pandemic.

Whilst I'm not invested here for capital growth I do expect better protection for my capital than is being provided at present.

A 23% share price increase is required here just to get back to q1 2020 levels. Something I can't see on the horizon.

It could simply be that the market has rebased BP value based on (i) a stated 40% reduction in output over the next 8 years, and (ii) a lack of clarity around future costs, revenue and profit from the transition to renewables.

lti - your comments are correct.

I have a current average purchase price of £3.46. I must admit the current share price trend is a concern to me.