When I made the decision to start writing a blog, I knew that I wanted it to be as transparent as possible. Before I started writing, I was busy reading other peoples blogs and tracking their progress. The blogs that stood out to me were the ones that were completely open and honest. They gave full disclosure to their methods and shared an insight into their lives (I've listed the Blogs that particularly stood out to me in my Blogroll). I found this really inspiring and interesting. I would like to personally thank those bloggers for sharing their knowledge, activity, and financial positions!
My aim is to continue flying that flag of openness and honesty in my blog. To that end, I will be sharing with you my activity in the stock market. I will let you all know when I buy, sell or if I have my eye on anything.
On the 5th March 2014, Just before I started the blog, I made a new purchase to my portfolio, British American Tobacco.
I bought 15 shares at a price of 3337.82p per share, which came to £515.12 with commission and stamp duty.
The Ex-Div date is 12/03/14, so I've only just got in, with the first payment date on 8/05/14 for 97.40p.
The company saw large dividend growth 3-5 years ago, and although it's settled more so in the last couple of years, the dividend grew 5.56% in 2013, and 6.64% in 2012. According to Morningstar the dividend is estimated to grow at 6.07% for 2014 and 6.60% for 2015.
As a dividend investor, this is one of the first set of figures I look for. I want to see consistent dividend growth in the past and a positive outlook for the future. If I'm going to become financially free, I will need companies that have a strong track record of not only paying over 3%, but show consistent dividend growth. BATS featured in the Top 20 dividend paying stocks in the UK in an article by Morningstar on 6th February 2014. They came in at number 14. I've made a note of the remaining 19 on this list, and I will do some research to see which ones 'tickle my fancy' for my next purchase.
The stock currently yields 4.4%, which is covered 1.5 times. The company have covered yields at over 1.5 times for the last 5 years.
I read at Motley Fool that the companies management have brought back 44 million shares at a cost of £1.5 billion in 2013 and has agreed another £1.5 billion for a 'buyback' program in 2014. The earnings per share growth are forecast to be quite slow in 2014, but are predicted to rebound up to 9% in 2015. As a dividend investor I'm not too concerned with this as I'm planning on benefiting from the long term dividends this company are known for. By the end of 2015, the stock is forecast to be yielding 5%.
In the summer of last year the share price hit it's 12 month high at 3807.50p which is over 14% higher than it was on 5th March 2014. This is encouraging for me when it comes to buying shares. I like to know that there is potential to increase in the price, and that I'm getting good value. It isn't the be all and end all though, As I'm mainly concerned with the companies dividend payments.
These are really solid numbers, and tick the right boxes for me.
If I smoked, I'd light up a cigarette now.
Thanks for reading!
Labels: Stock Purchase