Stock Purchase – BHP Billiton

On Tuesday 9th December 2014, I bought 73 shares in the FTSE 100 mining company BHP Billiton. The share price at the time of purchase was 1404.98p. The total cost with charges included was £1,042.71. I have perhaps moved a little quickly on this purchase as the price has fallen further since last week. At the time of writing it’s now at 1311p per share. 

Their average yield over the last 5 years has been a nice and steady 3.66%. The oil and energy sectors have experienced significant losses in share price over the last couple of months and BHP Billiton is no different. Their 52 week high was 2102p per share, and they’re currently hovering around their 52 week low. In fact, the current price is the lowest it’s been since November 2008. The drop in share price has resulted in the yield increasing to 5.59% on todays prices. 

The dividend payment increased every year since 1999. Over the last 5 years the average dividend growth rate was 8.19%. The most recent increase was 4.31%

Their average dividend cover is 2.68 over the last 5 years, and for 2014, the dividends were covered by 2.08

I haven’t invested any money in the mining sector so far, and BHP Billiton have been on my radar for some time now. The recent drop in share price has made them very attractive alongside other mining and energy companies. I’ve seen more purchases in BHP Billiton than any other in the Blogging community. Reading the numerous posts on their financial numbers and justifications to why you should invest in them has only strengthened my desire to be a shareholder. 

I didn’t hang around too long for this purchase. After my wages arrived I decided to invest in them straight away. If I had chose to wait 2 more days I would have had an additional £20 from incoming dividends to use towards the investment. As the price at the time was at it’s 52 weeks and 6 year low, I decided to go for it. In hindsight, I wish I had waited as the price has continued to drop. I remember just a couple of months ago where I waited a few days to see if a share price would drop further for it to continue growing before I purchased it. Timing the market is next to impossible to do. I’m happy with my purchase and I’m confident in time this investment will deliver solid dividends and capital growth. 


What do you think of BHP Billiton? Are you investing in the Mining/Energy companies right now? or are you waiting for the prices to stabilise?

0 Comments

  • weenie

    Reply Reply 15th December 2014

    Hey Huw, funnily enough, I added BHP Billiton to my own share portfolio too last week! Only bought a few, mainly because I wanted a bit of exposure in Mining too. Good luck to us with these!

  • diy investor (UK)

    Reply Reply 15th December 2014

    Hi Huw,

    I agree – its almost impossible to buy at the low point. I have a couple of months divis to reinvest at some point and have been looking at a top up of BLT as the yield is very tempting – also the spin-off of the new company next year should be a bonus.

    The other option is an investment trust – BlackRock Commodities Income (BRCI) with current yield approaching 7% paid quarterly – next xd 29th December.

    Mr Market has plenty of tempting offers on the table!

  • Tawcan

    Reply Reply 15th December 2014

    Haven't bought BBL only because we don't have any cash in our RRSP accounts. Will definitely look into BBL in the new year. Great buy.

  • Huw Davies

    Reply Reply 16th December 2014

    Hey Weenie,

    It's good to be a shareholder with you! I wish I had bought them this week as the price is ridiculously low at the moment. I'm eyeing up another oil or energy company in January if the prices remain this low.

    Here's to hoping we make a nice long term profit with BHP Billiton!

    Cheers
    Huw

  • Huw Davies

    Reply Reply 16th December 2014

    Hi DIY Investor UK,

    You're absolutely right. I'm trying to keep to setting a low point where you would buy the shares and once it's passed go for it. Sometimes, I have waited a day or two for additional dividends to come into my account, especially if they are substantial so I can get additional shares. I thought I was doing the right thing by moving early last week as the price was so low. Never mind!

    Blackrock Commodities Income is producing a very tempting yield right now. You can't argue with 7% paid quarterly. I still have my eye on a few other oil, mining, energy companies that are also very low right now. I'm not sure what I'll buy just yet, but there's plenty on offer!

    All the best
    Huw

  • Huw Davies

    Reply Reply 16th December 2014

    Hi Tawcan,

    I've been in your position for a couple of months now. When I've been about to move in on them another offer has been too good to pass up. I've been waiting a long time to become a shareholder with BLT. I hope you're able to become one soon too!

    Cheers
    Huw

  • Cerridwen

    Reply Reply 16th December 2014

    Hi Huw, after reading this post and doing some research I have just bought £1,500 worth of BlackRock World Mining IT. (It holds 10% Billliton so you can add me to your list of fellow shareholders). Thanks for bringing this sector to my attention as it had been mostly off my radar until now.

    Best of luck with your shares. 🙂

  • Financial Insependence UK

    Reply Reply 16th December 2014

    Hi Huw

    Snap, bought BLT at their low price, and then hey presto it falls further. However, like you I am (slightly) disappointed only because I could have got more shares if I had waited, but can't get too bothered about not being able to time the market.

    Like DIY Investor, I also think the spin off could be a nice bonus in the longer term.

    Hopefully we will all do very well from this company (including Cerridwen the BlackRock IT).

    Best Wishes
    FI UK

  • Huw Davies

    Reply Reply 17th December 2014

    Hi Cerridwen,

    Congrat's on purchasing the mining IT. It sounds interesting. I might take a look!

    Thank you for the well wishes, and yes as a fellow shareholder, I wish you all the very best!

    Huw

  • Huw Davies

    Reply Reply 17th December 2014

    Hi FIUK,

    I know, it is a little frustrating because of the large % drop in a small space of time, and because we could have invested more if we had waited. Oh well!

    Yes the little spin off does interest me, and I believe we'll see the financial benefits to it over time. Here's to BHP and the IT Cerridwen invested in!

    Cheers
    Huw

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