Since July 2019 BP’s share price has taken a serious beating, driving prices to sink to a 21-year low as of last month. Many contributing factors, such as tumbling oil prices and lack of green credentials are responsible for the brutal decline that has seen investors shy away from one of the top blue-chip companies.
Another concern surrounding BP is its dividend payments. Yesterday BP went ex-dividend, so investors would have needed to purchase shares in order to receive the next dividend on the 18th of December. BP’s dividend is not well covered by earnings, as the company lost money last year, this should be a concern for investors who are looking to buy at these low bargain prices, but as we all know, paying a dividend from your pocket is not sustainable in the long run, so investors should first look into whether or not earnings are likely to recover.
If we take a look on the bright side of things, analysts are forecasting a recovery, albeit a slow one. BP has plans to adapt to the changing world integrating oil with renewables, which in our opinion is a sound approach.
For a long term investment, BP is well worth considering in our opinion at these low single-digit prices.
Another concern surrounding BP is its dividend payments. Yesterday BP went ex-dividend, so investors would have needed to purchase shares in order to receive the next dividend on the 18th of December. BP’s dividend is not well covered by earnings, as the company lost money last year, this should be a concern for investors who are looking to buy at these low bargain prices, but as we all know, paying a dividend from your pocket is not sustainable in the long run, so investors should first look into whether or not earnings are likely to recover.
If we take a look on the bright side of things, analysts are forecasting a recovery, albeit a slow one. BP has plans to adapt to the changing world integrating oil with renewables, which in our opinion is a sound approach.
For a long term investment, BP is well worth considering in our opinion at these low single-digit prices.