Cash Flow per share ($/share) calculates the amount of incoming cash vs. the amount of outgoing cash for a company. It’s then divided by the number of shares outstanding to determine how much cash is generated per share. BP has grown its earnings per share while simultaneously reinvesting in the business. Unfortunately it’s cut the dividend at least once in the past 10 years, but the conservative payout ratio makes the current dividend look sustainable.
When evaluating a stock, it can be useful to compare it to its industry as a point of reference. Moreover, when comparing stocks in different industries, it can become even more important to look at the relative measures, since different stocks in different industries have different values that are considered normal. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
Zacks Research is Reported On:
In terms of revenue, it ranks 4th on the list and the company is vertically integrated as well with operations in all segments of the oil and gas sector. Operations are currently underway in 80 countries around the world, the company can produce 3.7 million barrels of oil equivalents per day, and it lays claim to nearly 20 billion barrels in proven reserves. On the retail end of the business, the company operates more than 18,700 fuel stations and its largest segment is in the US.
- It’s typically categorized as a valuation metric and is most often quoted as Cash Flow per Share and as a Price to Cash flow ratio.
- BP PLC rebranded its acronym to Beyond Petroleum, positioning itself as a trendsetter in an otherwise recalcitrant oil industry.
- Oswald Clint, a top 40% analyst from Bernstein maintains BP with a buy rating and raises their BP price target from $48.00 to $53.00, on Feb 8, 2023.
- I don’ like BP’s stock buybacks very much as I don’t believe they are a good use of capital, especially right now since shares of BP are more expensive than they seem.
- BP traces its history back to the founding of the Anglo-Persian Oil Company in 1908.
- Mr. Looney said in an interview that much had changed over the three years since he made what were considered industry-leading commitments to cut back on oil and gas output and reduce emissions.
The company’s share price lost 54 percent on the NYSE between April 20, 2010, and June 25, 2010, bouncing back slightly before the wellhead was capped on July 15, 2010. It has operations in almost 80 countries around the globe and employs more than 70,000 people. It produces around 3.8m barrels per day of oil equivalent and has total proven reserves of 19.341bn barrels of oil equivalent. BP says “transition businesses” were about 30 percent of $16.3 billion in total investments in 2022. For some higher-level executives at BP, insider knowledge and blackout periods can be a challenge for divesting BP shares.
Leviathan partners in Israel to invest $568 million in third gas pipeline
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends. It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, https://trading-market.org/ as long as earnings don’t drop precipitously. The Financial Times reported on Feb. 27 that Sawan and other Shell executives were impressed by BP’s share price jump after it dialed back carbon reduction goals.
“Aggressively investing money without any incremental return is still something that shareholders are nervous about,” he said. “Investors are still comfortable with certain parts of the https://bigbostrade.com/ renewable value chain, but not all.” Meanwhile, Third Bridge’s McNally said investors still value ESG ratings. However, he added investors “really care” about capital allocation.
A change in margin can reflect either a change in business conditions, or a company’s cost controls, or both. If a company’s expenses are growing faster than their sales, this will reduce their margins. But note, different industries have different margin rates that are considered good. And margin rates can vary significantly across these different groups. So, when comparing one stock to another in a different industry, it’s best make relative comparisons to that stock’s respective industry values.
BP: What are Zacks experts saying now?
And like the P/E ratio, a lower number is typically considered ‘better’ than a higher number. Like the earnings yield, which shows the anticipated yield (or return) on a stock based on the earnings and the price paid, the cash yield does the same, but with cash being the numerator instead of earnings. For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment. Similar to BP, Shell appeared to also signal the company would shift more of its focus back to oil and gas production, easing its focus on ESG criteria.
This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.17% per year. These returns cover a period from January 1, 1988 through May 15, 2023. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.
Whether you sell your shares often or accrue large amounts of vested shares, our advisors work with BP employees to create a tailored strategy to deconcentrate stock and diversify investments within their portfolios. As the AI market heats up, investors who have a vision for artificial intelligence have the potential to see real returns. Learn about the industry as a whole as well as seven companies that are getting work done with the power of AI. BP, which in 2020 set out its ambition to become a net zero company “by 2050 or sooner,” recently predicted that oil and gas would become a dramatically smaller part of the global energy mix by the middle of the century.
And, of course, the 4 week change helps put the 1 week change into context. The 20 Day Average Volume is the average daily trading volume over the last 20 trading days. The Sales to Assets ratio (or Sales to Total Assets or S/TA for short) shows how much sales are generated from a company’s assets. Historical EPS Growth Rate looks at the average annual (trailing 12 months) EPS growth rate over the last 3-5 years of actual earnings. The X Industry values displayed in this column are the median values for all of the stocks within their respective industry.
Despite the healthy demand for physical crude oil, certain economic factors could likely dampen the outlook for oil demand. Covid-19 cases are once again rising in China, and the country’s struggle to get its Covid cases under control with its zero-Covid policy could impact the demand in the world’s largest crude oil importer. In addition, the continued rising interest rates in the U.S. could also lead to a weakness in the market. The wide range of outcomes reflects several possible paths for the energy transition. But in each of BP’s three scenarios, the pace with which renewables enter the global energy system is “quicker than any previous fuel in history,” the report said.
However, while abrupt, it was not surprising to many analysts who watched BP lag well behind U.S. energy company stock performances. BP’s decision to dial back climate targets, and the stock price bounce that followed, raise questions about the value investors place on environmental investing. BP’s profits, and its assumptions that oil prices will be around $70 a barrel for the decade, are allowing Mr. Looney to promise a combination of increased investment and shareholder benefits, at least for now. Dividends will go up by 10 percent for the quarter, and BP announced $2.75 billion in stock buybacks, following $11.25 billion last year. BP, plc, once known as British Petroleum, is one of the world’s 7 oil & gas supermajors with operations spanning the globe.
Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts. And within the M Industry, it might further be delineated into the X Industry group called Banks Northeast. This allows the investor to be as broad or as specific as they want to be when selecting stocks. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B.
TotalEnergies (TTE) Signs a Deal With VNG on Green Hydrogen
Investors have been pushing hard for large energy companies to take stances on climate change and reduce emissions. The BP stock price has dropped due to the crash in oil prices, but that isn’t the only negative catalyst in the company’s history. With Capital.com’s BP share price chart you can not only quickly view the current British Petroleum stock quote, but also trace the company’s shares value in historic terms. Under BP’s new plans, oil output will decline 25 percent by the end of the decade from 2019 levels, to two million barrels a day, rather than 40 percent as previously announced. Carbon dioxide emissions from the oil and natural gas that BP produces will also be reduced 20 to 30 percent, instead of up to 40 percent. Analysts say Mr. Looney’s shift may signal a major change at BP and, perhaps, other European oil companies.
Midstream firms also generate the majority of their income from fee-based transportation contracts which makes their cash flows much more predictable and less exposed to wild changes in market prices for energy products. This is not the first time BP has taken a step back from ambitious plans to make itself greener. That effort largely dissipated, partly under financial pressures of the 2010 Gulf of Mexico oil spill. https://forexbox.info/ When you have a substantial amount of BP stock, it’s normal to get nervous about losing value on some of your higher basis shares or excited to see where the energy market is taking BP’s share price. However, one thing is critical to remember – BP is not the only big player in the energy industry. It may be challenging to sell BP stock in the current market environment where it outperforms the major indexes.