On Friday 6th March 2015, I purchased 445 shares in Energy company Centrica. The share price at the time of purchase was 244.87p per share. The total cost including charges and commission was £1,100.12. I made this investment in my taxable account.
I initially purchased shares in Centrica on 13th March 2014. The share price back then was 328.73p per share. My investment went down over 25% (in my NISA) on the purchase from last year, largely on the back of their 30% dividend cut.
I wasn't delighted with the 30% dividend, nor would I like most of my portfolio to follow. However, I don't see it as all doom and gloom for the owners of British Gas either. They're a massive company, in a defensive sector. When you consider their proposed dividend, they're still showing a strong yield (over 4.5%). They're also demonstrating growth in their earnings per share and profit when you look back over the last 10 years. The share price at the time of purchase this year was the lowest it's been since November 2009. It reached it's peak of 402.20p in September 2013 (18 months ago). I believe there is plenty of room and time for this investment to grow, and with it, dividends and capital gains.
I felt last year that Centrica was a solid investment, and although it hasn't turned out to be the case in the last 12 months, there's still a long way to go. I want to invest in companies for at least 5 years, and I'll no doubt be owning stocks in 30-40 years time. I have confidence Centrica will become a solid investment over the long term.
What are your thoughts on buying Centrica? Have you been re-investing into low performing sectors like energy and oil? Or do you think I've gone in too soon?
Labels: Stock Purchase