BP plc (BP) has been trading at $25.60, up 6.31% in premarket hours as of the last check on Tuesday morning. Last session, the BP stock price finished at $24.08 after losing -0.41%. BP stock price fluctuated between $24.04 and $24.7399. The BP stock traded 14.52 million shares, which was above its daily average of 12.93 million shares over the last 100 days. BP stock is currently trading at a price to cash flow ratio of 177.38 and a price to book ratio of 1.07. In light of the company’s increased dividends and stock repurchases, BP stock is rising.
What has BP Stock been planning?
Oil giant BP plc deals in energy around the world. As part of its business segments, BP operates in four divisions: Gas & Low Carbon Energy, Oil Production & Operations, Customers & Products, and Rosneft. BP manufactures and trades natural gas, produces biofuels, operates onshore and offshore wind power plants, and offers renewable energy solutions, such as hydrogen. Additionally, BP offers carbon capture, utilization and storage services. BP’s headquarters are in London, the United Kingdom, where the company was founded in 1908.
After beating expectations with its second-quarter profit of $2.8 billion, BP increased its dividend and share buybacks, according to a Reuters report today. In an effort to battle climate change, BP’s CEO Bernard Looney said that the strong results, driven by higher gas station sales, reinforce the company’s plan to shift from oil and gas to low-carbon energy as part of a comprehensive strategy. Looney said that the strengthened balance sheet and the excess cash flow allow him to pursue his agenda for energy transition.
Shell, TotalEnergies, and Chevron also raised their shareholders’ dividends last week, indicating the recovery from the pandemic which left energy demand plummeting. After halving its dividend to 5.25 cents in July 2020 for the first time in a decade, BP has increased its dividend by 4% to 5.46 cents. Generating surplus cash of $2.4 billion in the first half of the year, BP also plans to repurchase $1.4 billion in shares in the coming months.
An employee share distribution program was offset by BP’s $500 million buyback program in April. According to the company, net earnings were $2.8 billion in the second quarter as BP’s replacement cost profit surpassed analyst expectations of $2.15 billion. It marked a rebound from a loss of $6.68 billion a year earlier. During the first quarter, BP lost $2.63 billion. A drop in BP’s net debt reduced its debt to $32.7 billion from $40.1 billion.
BP anticipates stronger growth:
With anticipated supply constraints, BP says it has increased its benchmark Brent crude oil price forecast to 2030, despite also lowering its longer-term price forecast due to an accelerating shift to renewable energy. This resulted in a $3 billion increase in the BP’s pre-tax assets. Last year, about $17 billion in writedowns was made by BP. At $60 a barrel, BP estimates it will be able to buy 1 billion shares and boost its dividend by 4% per year through 2025.
