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Beginners Portfolio: What To Expect From BP plc

This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

The Beginners’ Portfolio is a virtual portfolio, which is run as if based on real money with all costs, spreads and dividends accounted for.

We’re into April, and it will be a busy month for Beginners’ Portfolio shares. Here’s a look at what’s coming our way:

Tesco results

TescoThe big news will be full-year results from Tesco (LSE: TSCO), the UK’s biggest food retailer, on the 16th. And I have to confess that Tesco has been a bit of a disappointment since it was added to the portfolio nearly two years ago in May 2012 — the share price has slipped by 13p to 292p, including an early rise followed by a fall of more than 20% over the past 12 months.

For the year to February 2013, we saw a fall in earnings per share (EPS) of 11%, which was pretty much expected, but current forecasts don’t suggest a return to EPS growth until 2016 — and for the year just ended, analysts are expecting a 17% fall. In its Christmas and New Year trading update, Tesco told of “weakness in the UK grocery market” and “a decline in UK like-for-like sales“.

On a forward P/E of under 10 and with a dividend yield of 5% expected, I’m not dumping Tesco — but I’ll be looking for news of that turnaround.

Rio Tinto going strong

The day before Tesco’s results, 15 April, we’re due a first-quarter production update from Rio Tinto (LSE: RIO). After the diversified miner reported new production records for iron ore, bauxite and thermal coal for the full-year last year, with cracking production and shipping figures in its final quarter, I’m expecting to hear more of the same.

I’ve been expecting it for some time, but with Rio shares up 12% over the past 12 months to 3,310p, I think there’s an increasingly strong chance that we really are past the bottom.

BP recovery continuing

BPWe’ve done reasonably well with BP (LSE: BP) (NYSE: BP.US) since it was added, with an 11.6% rise to today’s 485p over a period of 20 months — and we’ve had about 9% in dividends on top of that. The recovery from the Gulf of Mexico disaster is still erratic, and we’re expecting an EPS fall this year after a decent 2013. But even with a drop in earnings, the shares are still on a forward P/E of only 9.7 (falling to 9.3 for 2015) and the City is predicting a rising dividend yield — 4.9% this year, 5.2% next.

We should have Q1 figures on 29 April — and we may get more news of BP’s ongoing legal issues regarding Deepwater Horizon damages claims.

The other two first-quarter updates we’ll have during the month will be from GlaxoSmithKline and Barclays — the former is up 9.7% to 1,581p since June 2012, while the latter is still a new addition to the portfolio.

A nice property result

houseOne of our very best performers has been housebuilder Persimmon (LSE: PSN). We’re up 120% on the share price, and we’ve had £59 in special dividend so far. And there’s another 70p-per-share dividend scheduled for 4 July, with an ex-dividend date of 4 June, as the company continues its return of cash to shareholders with another chunk, this time of £214m.

Persimmon will be delivering an interim update on 16 April.

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Alan does not own any shares mentioned in this article. The Motley Fool owns shares in Apple and Tesco, and has recommended shares in GlaxoSmithKline.