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Dividends are a return of capital to a shareholder, not a return on capital. The company is notably smaller after paying a dividend and therefore the SP drops. They’re not “free money” and IMO hinder the growth of a company. As Smithy said, they’re best suited for funds and people seeking an income in retirement (although they’d arguably be better off investing in the market as the total return is likely to beat any dividends).
I'm fairly confident that our trading division will have done better than EDFs of late...
Also agree on the revenue issue, Smithy. The revenue will be more than replaced by the renewable pipeline in my opinion, alongside the move into retail which can bring high margin revenue.
I personally am not worried about revenues reducing through to 2030 and actually think we'll see revenues grow over this period.
Hi, Sharefall.
We live in the age of activism, there will always be something for someone to scream and shout about. In my opinion it's the role of world governments to balance these opposing views and do what's in the best interest of all people. We'll certainly see a little more balance now that Russia and Saudi have joined the conversation over the move towards net zero. I think China, India and the US will take much longer than planned to transition away from fossil fuels in any meaningful way, too.
I personally believe that BPs current position is in line with what might be achievable over the coming decades (i.e. a reduction in the use of fossil fuels but a significant ongoing demand for it. After all, the population is set to grow and they will want houses to be built, to keep them warm, new infrastructure, to travel as we do today and that will all require a lot of energy).
I also believe that if BP succeeds in capturing the share in the renewal market that it sets out to, then the lost revenue from O&G can more than be replaced, leading to long term growth. Lydia Rainforth was right all along, I think we will see double digit total returns over the next few years at least and I believe that through the transition we will be able to exceed market returns, that's why I invested after all.
Anyway, that's all in my opinion.
Good luck to all holders and traders alike. I hope that we all make a bucket full!
Erroneous claim there, Gary. That is based on a barrel at $60, not the recent high prices >$80pb.
Also who really knows what the SP could be in the long term. It could hit £10, then again it might not.
I personally believe that if BP succeed in making their renewable pipeline pay (50GW by 2030), alongside a strong future O&G price, share buybacks and increasing dividends over time, we could potentially see fresh all time highs through the decade.
I also think BL’s strategy of going hard early on green and getting some deals signed will give BP a leg up on it’s competitors, I think his strategy will balance the needs of all parties very well through to 2030.
I believe that BP has an exciting future ahead as it transitions to an integrated energy company. The world will always need energy in one form or another.
Respectfully, I disagree.
I’m not expecting an increased divi payment (although it would be nice), but fully expect a large share buyback to be announced and to hopefully see some nice debt reduction in there too.
I don’t know quite what happened with Shells results today but I don’t expect the same for BP next week.
The one (slight) unknown is the performance of the trading division although from recent news it might be a little better than that of Shells.
Time will tell, of course. Roll on Tuesday
Great CFFOs but what about the $447m loss attributable to shareholders? It's the first thing you see when you open the report. Can't say I was blown away by their results, personally. Although a near $8b debt reduction is nice to see.
I firmly believe that BPs results will shine brighter next week.
(I don't hold)
I hope that they had the foresight to hedge their fuel, even after losing $B's from fuel hedging at the beginning of the pandemic (it would have been a shrewd move) . I agree this could hit the balance sheets of airlines once again, although rising demand and the impending opening of the US market will help steady their ships a little.
Take a look at the wider market, it has seen a similar pullback today, it’s not only the oilers. Even at today’s price BPs SP is up over 22% since the markets opened in January. Come markets closing again in December I don’t think the total return will be looking too shabby and expect to see another good return through 2022.
If you don’t think the share will outperform the market then I don’t understand why you are invested in it? If you do fundamentally think it is a quality share with a bright future, then I don’t understand why you lose your mind when it pulls back sometimes?
https://oilprice.com/Energy/Energy-General/UK-Snubs-IEA-Suggestion-To-Stop-Oil-Exploration.html
A P/E of 1… I’m afraid those days are over (and our jobs are all the more difficult because it is so).
In either case, commodities tend to be good hedges against inflation.
The world is emerging from the pandemic, albeit more slowly in certain countries, but they too will get through it. IMO with improving sentiment, a resilient dividend and a SBB program running through 2021, the pressure on the SP should be generally upward.
I personally agree with Lydia Rainforth that the market is underestimating the potential returns from BP over H2 and beyond and believe we will see a £100b mcap again in 2022.