As the unofficial ‘oil and gas’ thread I will post a brief bit about BPs earnings here:
from BBC -
Bernard Looney told Reuters that the oil giant was "a cash machine at these sort of prices"
from BP earnings document:
Q3
- $3.3bn profit (up from $2.8bn in Q2)
- Net debt reduced further to $32bn from $32.7bn in Q2 and $40bn a year ago.
- Dividend for Q3 still at the Q2 level (4% raise on last years quarterly divs) of $0.0546 working out to a 4.6% yield on 350p share price.
- $0.9bn Buybacks in Q3 ($0.5bn in Q2)
Shareholder returns going forward:
- They have announced further $1.25bn buybacks for this coming quarter (roughly 1.3% of share count at 350p share price).
- Dividend maintained at same level (4.6% annual yield on 350p)
Speculative valuation thoughts:
TTM P/E now around 11
Next quarter likely be down at 8 P/E if share price constant at 350p, if P/E 11 maintained with anticipated earnings for Q4 then upside of 30%+ potential to 450p+.
Clearly todays 3% share price drop currently is a result of investors who wanted further dividend growth, I am actually happier they are plowing into buybacks whilst the stock is in this price range. If oil and gas dont have massive pullbacks then I see BP as a 400p+ stock within 3-6 months (15% further upside) with another 2.5-5% shareholder returns of 3-6months buybacks/divs.
Still long, and still my largest holding.