Bullish Sign with BP Buying Again!
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Sep
3
Tim Lambert
Bullish Sign with BP Buying Again!
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BP PLC (NYSE: BP), the second largest oil company in Europe behind only Royal Dutch Shell (NYSE: RDS-B), the second largest oil company in the world behind only ExxonMobil (NYSE: XOM), just bought Statoil Fuel & Retail, an aviation fuel business, from Alimentation Couche-Tard (OTCPK: ANCUF).

This is significant as it shows that BP PLC is starting to add, rather than shed, assets as a result of the Gulf of Mexico disaster back in 2010.

The acquisition of Statoil Fuel & Retail brings in 73 more airports.  BP PLC now has more than 600 airports in its aviation fuel division.  It is obviously building that up in anticipation of global growth.

Even more important is that BP PLC is now in a offensive posture, rather than defensive in responding to all of the legal action from the Gulf of Mexico accident.

BP PLC, like other Big Oil stocks, such as ExxonMobil and Royal Dutch Shell,  has done well due to the global recovery from The Great Recession.  Over the last year of market action, BP PLC has jumped nearly 20 percent.  But it has fallen in recent trading, down for the last week, month, quarter, and six months (chart below).

That is much the same story with Royal Dutch Shell and ExxonMobil.

But BP PLC tops Royal Dutch Shell and ExxonMobil in dividend yield.  Big Oil stocks are known for offering big dividend yields.  ExxonMobil has a dividend yield of 2.80 percent.  The dividend yield for Royal Dutch Shell is just over 4 percent.  For BP PLC, the dividend yield is 4.96 percent.  BP PLC easily has the cash flow to finance the dividend; and increase it for the future.  That rewards shareholders with a raise for the simple act of not selling the stock, a nice treat for an income investor!

When the dividend yield is that high for a company like BP PLC that is on the move, long term investors should look upon dips as buying opportunities!

 



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