Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
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Err why would you do that when the cost of debt 1% vs cost of equity 5. 5%. I'm. Glad you are not running BP. Would you honestly pay off lowest cost capital befilore highest cost? That's either commercial madness or ignorance
Well said Smithy
Pray tell, bearing in mind Looney will be in the seat for probably upwards of a decade, would he want sugar rush increases in underlying SP, when he can significantly increase metrics such as EPS, by throwing a load of cash at buybacks, with the share price significantly below fair value? Then, when earnings flood back, he can then bask in the glory even further, with increases in the numerator, whilst reducing the size of the denominator?
BP is a long-term investment. All the while, you will be milking 5%+ with a slowly increasing SP. The real gains are 5-10 years from this point. If you havent got enough years left to enjoy 200-300% gains in that timeframe, well, I suggest you should have a long hard think about whether BP is still for you.
Looney isnt here to make us a fortune in 5 minutes. He is here to transition the business, ensuring its survival, whilst giving investors a significant return in both compound dividend interest and long term growth. Whilst he milks his bonus for pumping EPS.
On page 28 of the Q1 presentation, there’s an expectation of maintaining a “resilient” dividend of 5.25c, which works out to c5% with a SP at £3. I can’t see the SP moving up significantly until the dividend is increased, in-line with comparable competitors
Hopefully, the expectations of crude at $50 will be revised up, giving scope for the dividend to be reviewed. Or, at least a special dividend to reward shareholders, vs. The buyback route
I think the only thing that will establish a higher share price at the moment is a higher dividend.
Buy backs are a complete waste of time for any expectation of a short term rise - even a billion $ thrown at buy backs is a fraction of a dollar on the share price. Sure if they do that for the next 10 years it will add up. But the dividend is only at 5% because the share price is at $24 - if institutions or individuals want a dividend stock - BP ONLY works is the share price is this low. Double the dividend and we could quickly see a new level for the share price NOW. If they doubled the dividend I would be quite happy paying $35 for the shares because I would still be getting a 7% plus dividend. The market would then decide the balance for the share price. I think they should increase dividend and focus on paying off debt - when the debt has gone then start with buy backs.
Surely his job is only at risk if he can’t get the company to make profits, something they do easily and if his green plans work the share price could be silly high in years to come IMHO.
Interesting view point.
https://www.thisismoney.co.uk/money/markets/article-9847149/BP-struggle-emulate-Shells-big-dividend-increase.html
. . . more risk if he increases the dividend and then has to reduce it in the next couple of years. You can forget any increase to the dividend.
As for a dividend increase having a positive impact on the share price . . . well it hasn't had much of a positive impact on Shell's share price, has it?
Correction:-
risk if he cannot deliver a share price major investors are reasonably happy with.
Personally with Brent crude around ****$75**** a barrel I don't think £2.90 is good enough.
IMHO we should be North of £3.50.
A quick way to move the sp up would be to tweak the dividend "in the light of the improved OIL price" dare I suggest.
All IMHO.
risk if he cannot deliver a share price major investors are reasonably happy with.
Personally with Brent crude around ****$75**** a barrel I don't think £2.90 is good enough.
IMHO we should be North of £3.50.
A quick way to move the sp up would be to tweak the dividend "in the light of the improved share price" dare I suggest.
All IMHO.