Yahoo Finance BP PLC's Dividend Analysis
Exploring the Sustainability and Growth of BP PLC's Dividend Payments
BP PLC (NYSE:BP) recently announced a dividend of $0.44 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-05-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into BP PLC's dividend performance and assess its sustainability.
What Does BP PLC Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
BP PLC is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2023, it produced 1.1 million barrels of liquids and 6.9 billion cubic feet of natural gas per day. At the end of 2022, reserves stood at 7.2 billion barrels of oil equivalent, 56% of which are liquids. The company operates refineries with a capacity of 1.6 million barrels of oil per day.
A Glimpse at BP PLC's Dividend History
BP PLC has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BP PLC's Dividend Yield and Growth
As of today, BP PLC currently has a 12-month trailing dividend yield of 4.50% and a 12-month forward dividend yield of 4.60%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, BP PLC's annual dividend growth rate was -1.90%. Extended to a five-year horizon, this rate decreased to -10.10% per year. And over the past decade, BP PLC's annual dividends per share growth rate stands at -3.00%.
Based on BP PLC's dividend yield and five-year growth rate, the 5-year yield on cost of BP PLC stock as of today is approximately 2.64%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, BP PLC's dividend payout ratio is 0.34.
BP PLC's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BP PLC's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported net profit in 7 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. BP PLC's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and BP PLC's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BP PLC's revenue has increased by approximately 33.90% per year on average, a rate that outperforms approximately 80.26% of global competitors.
Next Steps
Considering BP PLC's consistent dividend payments, its strategic management of payout ratios, and robust revenue growth, the company presents a compelling case for value investors focused on dividend yield. The historical data suggests a careful balancing of growth and dividend distribution, positioning BP PLC as a potentially resilient investment in the volatile oil and gas sector. Will BP PLC continue to manage its resources effectively to sustain and possibly grow its dividends? Only time will tell, but the indicators point towards a prudent investment strategy. For more insights and tools to discover other high-dividend yield opportunities, consider exploring the High Dividend Yield Screener available for GuruFocus Premium users.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
