BP: Buy This Stock

BP (BP) is implementing a robust and disciplined capital spending approach which is well aligned with the company’s growth strategy and allowing it to deliver viable returns at approximately $80/bbl. This superior capital allocation approach has also provides it with an opportunity to benefit from deflation.

Further, this casual spending strategy inculcates process flexibility. Moving ahead, the key energy mining company is focused on delivering safer and highly reliable operations through significant improvement in process safety, expanding plant efficiency and strategically managing the planned outages.

Making the right moves

BP has strategically restored the exploration momentum with planed reloading of the growth pipeline and driving continued success into 2014.
There’s ongoing resource progression and includes key resources of the Canadian oil sands, Oman and Trinidad gas and US Lower 48 unconventional gas. Further, BP has impressively extended giant fields with ongoing expansion in key giant reservoirs and unlocking of several other strategic resources through advanced technology. Importantly, BP declared an unchanged dividend of $0.10 per ordinary share during the quarter to be paid in March.

The growing company margins, significant volume growth, superior cost efficiency and expanding reliable company operations is believed to drive long-term sustainable growth for BP and thus, benefiting the key stakeholders.

The long-term strong project pipeline for fiscal year 2020 and beyond is expected to drive lasting impressive company growth and encouraging it to strategically offer improved shareholder returns.

The consensus estimate among 31 polled investment analysts evaluating BP plc suggests investors to “Hold” their position in the company. This consensus estimate is maintained since the investment analyst’s sentiments declined on Feb 03, 2016. The earlier consensus estimate suggested that the company will outperform the market.


Overall, the investors are advised to “Hold” their position in BP plc looking at significant growth prospects of the company with the steadily improving global commodity demand and pricing environment but, weaker company’s financial position with notable total debt of $53.17 billion against smaller total cash position of $26.61 billion, restricting the company to continue with its daily operations profitably. The profit margin of -2.89 indicates no profit but loss. However, the PEG ratio of 2.41 signifies healthy company growth compared to weaker industry’s growth average of 0.38.
Published on Mar 25, 2016
By Vinay Singh

Copyrighted 2020. Content published with author's permission.

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