I bought a smallish position of this @ 12.50 on 10/19/2009. The news looks pretty strong. They have settled a major lawsuit and reinstated the dividend. Even after today’s spike around +12% or so, the dividend yield for 2010 will be about 10%. If there is any kind of meaningful pullback, I’ll probably try to put some more money in. No matter the stock price, you can figure your annualized return as a factor of the dividend instead of using the stock price. For instance, since I bought at $12.50 as my original investment and they pay $1.50 annually for dividend, then that is 12% of my original investment. Assuming that the dividends remain at this rate, then I get a 12% annualized ROI as long as I hold the stock. Hopefully, they will eventually be in a position to raise their dividend again. At one point, they were paying 0.52 a share (currently 0.375 a share). If they are able to do this say in 2011 or 2012, etc, then let’s do the math:
If you buy at $14.90 = 14%
At my price of $12.50 = 16.7%
Thus, as you can see, at this point, I really don’t care about stock appreciation (though it’s nice). The idea is to hang onto this stock as long as they are paying juicy dividends and hopefully they will be in a position to raise dividends again when their profits dictate that it is possible.
In the mean time, I’ll be looking to pick up more on any significant pullback. If the market takes a hit in the next few weeks, remember this stock!!!
BreitBurn Energy Partners L.P. Up 11.5#037;, Settles Litigation and Reinstates Quarterly Cash DsitributionBY Midnight Trader
— 11:12 AM ET 02/08/2010
11:12 AM Eastern Standard Time, 02/08/2010 (MidnightTrader) – BreitBurn Energy Partners L.P. (BBEP
BBEP BREITBURN ENERGY PARTNERS, L.P. - COMMON UNITS REPRESENTING LIMITED PARTNERSHIP
14.90
Change +1.55 (+11.61%)
AS OF 11:32 AM ET 02/08/10.
) is up after the company says all litigation between the Partnership and its directors and Quicksilver Resources Inc. has been settled. BreitBu