Stock Purchase – Centrica plc

After making the decision to fill up my remaining allocation of my shares ISA with some surplus money I had in my cash ISA (£4,745), see Filling up ISA – Use it or lose it, I now had some share shopping to do!

I’m still in the early stages of Dividend growth investment, and as you can see from my portfolio, I haven’t invested in a lot of companies at present. I was planning on spreading out the money I had into 4 companies (£1,186 per company including fees). This would expand the number of companies I owned shares in, and would spread the risk of my investments. My plan was to buy shares in some stable companies, with positive Dividend growth (at least 6%), sufficient dividend cover (at least 1.5), and ideally at a price that is viewed as undervalued. 

My second purchase was BP. My next purchase was Centrica. 

I bought 241 shares at a price of 328.728p per share, which came to£1197.98. It paid out a very healthy 4.9% dividend  for 2013, and it has had a dividend cover of over 1.50 for the last 5 years. It’s averaged a dividend payout of 4.8% over the last 5 years. 

As a dividend growth investor, I was pleased to see a consistent 6.1% growth in it’s dividend for the last 5 years. I’m currently looking for shares that show a consistent growth of around 6%. 

Centrica is 18% lower than it’s 52 week high share price. I’m pleased to see the share price went up 2% the day after I purchased it, nice start, and may it continue to grow! It’s being priced between 365p and 385p, and it’s recommended as a ‘buy’ from brokers on my ISA share account. 

This company has ticked all the major boxes for me to make a purchase. It’s pays dividends at a high rate, (4.9%) it’s shown consistent dividend growth over 5 years (6.1%), it has a dividend over 1.5, and in my opinion is currently slightly undervalued. 

Thank you for reading!



Leave A Response

* Denotes Required Field