ExxonMobil doesn’t have the highest yield in the energy patch. Yet it’s an industry giant that has proved time and again that it knows how to handle the inherent volatility of the industry in which it operates while continuing to reward dividend investors well. If you’re looking for a dividend-paying energy stock that you can count on, ExxonMobil is the first name you should consider. After looking at ExxonMobil, you’ll probably want to compare all other options to it. In the end, you might end up back where you started — with industry giant ExxonMobil as your prime selection.
The BP share price has leapt in recent weeks thanks to soaring oil values. But even at the current price of 523p its shares offer a higher forward yield than most other UK blue-chip shares. A comparison of dividends with net income and free cash flow on a per-share basis, compiled by Laurentian Research for The Natural Resources Hub based on the company-released sources. Let’s apply the above dividend stock-picking criteria to BP, with the best interest of income-oriented, long-term investors in mind.
There aren’t all that many dividends that can withstand such extremes. HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. James Beard has positions in HSBC Holdings, Lloyds Banking Group Plc, and National Grid Plc. The Motley Fool UK has recommended Barclays Plc, HSBC Holdings, Hargreaves Lansdown Plc, Lloyds Banking Group Plc, and Schroders Plc. BP, a global energy company, is dedicated to delivering reliable, efficient, and sustainable energy solutions worldwide. With a rich history spanning over a century, BP operates across all areas of the energy sector, including exploration, production, refining, distribution, and marketing.
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An industry with a larger percentage of Zacks Rank #1’s and #2’s will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4’s and #5’s. Low-carbon businesses including biofuels, electric vehicle charging, hydrogen and renewables account more money than god for a fraction of BP’s earnings. The company still aims to sharply expand its renewables and low-carbon business by the end of the decade. Looney told Reuters that the buyback programme allowed BP to reduce its share count by 9% over the last 4 quarters.
Earlier this month, Looney’ resignation as chief executive officer was spurred by claims that the chief executive advanced the careers of women with whom he had previously undisclosed relationships. In the interim, Kyle Koontz, the current vice president of development of BPX Energy, will assume the role of the division’s chief executive. Orlando Alvarez, currently the senior vice president of gas and power trading, will reportedly succeed Lawler as the head of BP America. The company has a long history of increasing its dividend payments year on year — in 2023 it went up by 8.8%. Encouragingly, it’s been 12 years since it last cut its payout. They predict annual earnings to keep rising through to 2025 as well, pulling dividends higher in the process.
- Note, too, that when oil prices recovered, ExxonMobil simply reduced its leverage.
- A common metric for dividend reliability is the annual payout.
- It halved its dividend to 5.25 cents in July 2020 for the first time in a decade in the wake of the pandemic.
- For the third quarter, BP expects oil prices to be supported by OPEC supply cuts alongside above-historical-average refining margins helped by lower inventories and U.S. demand.
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Add BP plc to receive free notifications when they declare their dividends. Our experts picked 7 Zacks Rank #1 Strong Buy stocks with the best chance to skyrocket within the next days. The Zacks Consensus Estimate for 2023 is $3.04 per share, which represents a year-over-year growth rate of 12.18%.
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The owner of B&Q also downgraded its forecasts but maintained its interim payout. Fourteen of these 20 companies have beaten the S&P 500’s 74% total return over the past five years. Predicted dividends are covered between 3.1 times and 3.2 times by anticipated earnings through to 2025.
After all, if you begin with a high dividend yield but watch share price decline over the years, your overall return might be lousy. The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards.
When does BP (BP) pay its next dividend?
They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors. From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. The dividend yield measures the ratio of dividends paid / share price. Companies with a higher dividend yield tend to have a business model that allows them to pay out more dividends from net income like real estate and consumer defensive stocks.
Companies that pay dividends tend to have consistent positive net income. Income investors use dividend yield and dividend growth rate to measure the total return capability of a dividend-paying stock. As a rule of thumb and not intended for mathematical rigor (see here), the sum of the dividend yield and dividend growth rate approximates the expected total return. Although its interim dividend remained unchanged, it reported a 51% fall in earnings for the first six months of 2023, compared to the same period in 2022. Its generous yield is due more to a falling share price than exceptional shareholder returns. In fact this FTSE company has reined-in its plans to cut oil production through the rest of the decade.
BP Dividend Calendar
And in this era of high crude prices — and following the exit of green energy advocate Bernard Looney as chief executive in recent days — the business could double down on its oil and gas operations still further. It isn’t shocking that ExxonMobil would be able to increase its dividend in a year like 2022 when oil was hitting $120 per barrel. That’s the easy part, given that just about all energy stocks were gushing profits at that point. But what about in 2020, when pandemic-driven economic shutdowns pushed oil to a low point? It was so bad that, for a brief moment, the price of a barrel of West Texas Intermediate crude, a key U.S. energy benchmark, fell below zero. The annual dividend still ended up higher than it was in the previous year.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Some may argue BP under the leadership of CEO Bernard Looney will be transformed into a renewable pivot points trading powerhouse. That may well be true from a viewpoint of company-wide decarbonization, but I believe what Mr. Looney is doing at BP may turn out to be extremely detrimental for income investors. It is worth emphasizing the presence of an economic moat is imperative to securing a reliable stream of dividends, especially for strategy 1 and strategy 2.
As an investor, you want to buy stocks with the highest probability of success. 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 in your personal trading style. Writes about the intersection of corporate oil and climate policy. Has reported on politics, economics, migration, nuclear diplomacy and business from Cairo, Vienna and elsewhere. In May, BP slowed down the pace of its quarterly buyback programme to $1.75 billion from $2.75 billion in the previous three months, prompting its largest daily share drop in more than three years. Gold helps investors sleep soundly as it preserves wealth and creates a hedge against inflation.