The 52 week high was back in April 2014, when it topped out at 2,613p. This point is 23.5% higher than it was at my purchase price. I extended my position in RDSB for it’s stable and above average dividend yield more than it’s capital growth potential. When I look back at it’s 5 and 10 year share price history, I was surprised how stable the price had performed over time. 10 years ago the price was at 1,562p per share, which is a 35% increase. Nothing special!
With that said, the oil/energy sector have suffered a significant drop in prices over the last 6 months, and I believe that with RDSB I can benefit from long, stable dividends and some capital growth for many years to come.
Why not invest in BP?
I already have a larger holding in BP over RDSB (twice as much). BP received a boost this week when they heard their fine was going to be significantly lower than they had planned for. There’s a strong argument to suggest BP has more potential right now, especially on the capital growth front. I wouldn’t argue it either. I want to ensure my portfolio is well diversified and spreading my investments across two major players in the oil/gas industry I believe I’m doing just that.
What do you think of RDSB? Are you investing in the oil/gas companies right now? or are you waiting for the prices to stabilise?
0 Comments
My Dividend Pipeline
18th January 2015FFF,
Very nice pick up of Shell. Like you I am a bit overinvested in BP so I like the idea of adding to Shell, Chevron, and Exxon to balance things out a bit.
Keep up the good work!
MDP
No More Waffles
18th January 2015Huw,
Great purchase! I wish I had some free capital a couple of days ago because RDS took a pretty big hit again.
I wonder where the bottom for many of these companies is in terms of price. Even though the value of my dividend stocks doesn't matter too much, it's nice to buy into a company at an attractive and/or high yield. It's like you said: more than capital appreciation, it's the dividends from giants like Shell that make the bulk of return.
Cheers,
NMW
Retirement Investing Today
18th January 2015Hi Huw
Great minds think alike. I already had a full helping of RDSB so I grabbed a chunk of BP on Tuesday. The BP purchase brings my High Yield Portfolio share count to 13.
Cheers
RIT
Huw Davies
18th January 2015Hi RIT,
Yes, great minds! I don't want to overdue it on the mining/gas/oil/energy companies but I certainly want a slice of the action. There are some excellent yields from huge companies currently on offer.
Congratulations from your end. I'm sure we're both smiling from these purchases in 5+ years.
Many thanks
Huw
Huw Davies
18th January 2015Thanks NMW.
They're a massive company with regular large dividends. They were also one of my first purchases when I started DGI. There's always the possibility that the price will drop further but I'm prepared to take that risk at the moment. I think I will gain from the capital appreciation in time, but Shells dividends are very good and have been for some time.
All the best!
Huw
Huw Davies
18th January 2015Hi MDP,
Thank you very much. I'm pleased with it! There are a few huge companies on sale at a great price right now. Like I said above, there's always the chance they could drop further, but that id the case for all companies. Thanks for stopping by!
Cheers
Huw
UK Value Investor
18th January 2015Hi Huw,
I hold BP and will probably sell if the shares increase by double digits in the next year or so. I also sold my shares in Shell back in August for a decent short-term profit, although I might buy again if they keep dropping.
I think both are reasonable investments at the right price, although Shell has the better track record (not surprising given BP's deep water disaster).
Like your blog by the way,
John
Huw Davies
18th January 2015Hi John,
Thank you for stopping by and leaving a comment. I'm a big fan your website and your columns. It's reassuring to hear a positive comment about my purchase from an investor I respect.
I think Shell are a slightly more conservative investment due to the Oil Spill, but I also believe they present a better opportunity for capital gains.
Thank you again!
Huw
Tawcan
18th January 2015Hi Huw,
Great buy. Royal Dutch Shell is a company that I plan to add to our dividend portfolio in the near future. Solid company, great yield, what else not to like?
Huw Davies
18th January 2015Hi Tawcan,
Thanks! I agree, a very solid company with great dividends. I think it's at an attractive price right now. Although there are many other companies at good prices right now. It's not easy selection one at times!
Cheers
Huw
Theres Value
18th January 2015Hi Huw, great buy. Yes, I'm planning to add to my RDSB this Friday, as I only trade once per month on the 23rd. I'm considering National Grid too. I might get both, or either, depending on how much spare money I'll by then,
Cheers
weenie
19th January 2015Hi Huw, I already hold a few shares in BP and was deliberating on whether to add to them or buy Shell. Maybe opt for the latter – as you say, spreading the investments across the two major players in the oil/gas industry.I'll just continue to keep an eye on them for now though – have my eye on diversifying into some consumer cyclical shares first.
Good luck with these!
DividendsForDummies
19th January 2015Very nice purchase. I added shares of RDS-B last month too. Solid company, and the yield is incredibly high right now.
Dividend Dreams
19th January 2015Great buy. I am long on energy stocks and I am excited about the sale going on in this sector. I do not own Shell, perhaps I'll add this company to my portfolio as well. Best of investing luck in 2015.
Huw Davies
19th January 2015Thanks M! I think they're both great options. I would say that as I own both!
NG are likely to be more stable over the long term with regards to share price, and without checking their share price is likely to be bit higher right now as a result. But they're both solid income providers paying higher than average dividends. Good luck with your decision. I'm routing for you!
Cheers
Huw
Huw Davies
19th January 2015Hey Weenie,
BP are very attractive right now, and I understand why people are sucked into them more than Shell at present. I want to invest for the long term, and I'd prefer to separate my holdings in each sector to spread the risk a little. If anything happens to Shell, BP might be OK and visa versa. I've done the same thing in the mining industry with BHP Biliton and Rio Tinto.
If you already have money invested in BP, I think you're doing the right thing by looking elsewhere for now. There are plenty on sold consumer cyclical shares out there to benefit from. I'll look forward to seeing what you end up going for. Good luck!
Cheers
Huw
Huw Davies
19th January 2015Hi DFD,
Thank you very much. It's nice to be a shareholder with you!
Thanks for stopping by
Huw
Huw Davies
19th January 2015Hi DD,
Thank you for stopping by. I appreciate the kind words.
There are many great deals out there right now. It's nice to have a bit of capital to get a piece of them. Good luck with your decisions too. All the very best!
Huw
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