Member Info for zac0_4

At the end of 2020 there were 20,264m shares in circulation. Today . . . 20,643m. That's with a 707m share buy back in 2021 and a further 300m to date this year.

I'll need some convincing that the buy back programme is having any positive effect in reducing the number of shares in circulation. Unless I'm missing something.

PeterH1 - So you're ignoring the 1,034,433,759 shares held as treasury shares?

If my understanding is correct, treasury shares are the company's own shares that it has bought back where those shares have not been cancelled. This means that these shares still exist and, therefore, the company's share capital has not been reduced until they are cancelled.

Do you understand how it works?

" . . . The number of ordinary shares in issue after this admission will be 20,643,650,955 . . ."

So, despite all the buybacks, there's more shares in circulation than at the end of 2020!!!!! (20,264,027,000)

How is this returning cash to shareholders?

I'm beginning to fear that sp stagnation has arrived. And that's with $100+ pb. I shudder to think where the sp will settle when the oil price gets back to more normal levels. And it will.

meoryou - if the share price remains static for the next 12 months your investment here will deliver you a total return during that period of a little over 4%. If you believe your investment continues to deliver 8% year in year out you're mistaken!

On the basis that they haven't committed to a figure for this current round of buybacks the figure currently reached may be it until a further announcement next quarter.

PeterH1 - My negative views? I'd say my views are pragmatic and realistic.

And to then say I've picked a period to suit my view, well yes. 22 years, $69bn of buybacks and a 40% reduction in the share price. What time period would you like me to use? How about your 17months? Yes, the share price has risen 92% since it's low in October 2020.

But let's not forget that was on the back of a 61% sp collapse from £5.00 in Jan -20. So, a nett result today of -25% in the share price.

But let's look a bit further into your time scale. A 92% increase in the share price on the back of a 187% increase in the oil price over the same period. Oh, and let's not forget the share buybacks!

So I make no apologies for appearing negative. I'm simply being realistic. What is it going to take to move the share price significantly closer to it's pre-pandemic level? I know, a move to renewables. Can anyone tell me what revenue, and profit, we enjoy from our current renewable portfolio?

Or how about the cost to replace the revenue and profit we'll lose by reducing our output by 40% over the next 8 years. I'd love to know! And probably so would the market. Maybe there's the answer!!

. . . since 2000. Or, to put it another way, BP have purchased over 7.7bn of their own shares during that period. The result? A 40% decline in the share price!

Happy - ha, ha, ha!

Sorry, couldn't resist. No offence meant. Have a good weekend!

HappyInvestor100 – more frustrated than negative! Record profits, oil at $120+ pb and still we sit over 20% down on our pre-pandemic level.

Mid January the BP share price was £3.95. Average oil price in January was around $87 pb. Today the sp is 4% lower on the back of a 38% increase in oil price. So (unfortunately), I make no apologies for appearing negative.

As for my comments regarding a windfall tax, well I can’t help but feel that pressure from all sides will build to such a level on the back of, what should be, a continued strong growth in record profits. Couple that with rising consumer energy costs, fuel prices at £1.70+ per litre and the likely rise in food prices and there will be a real call for one.

I’m actually coming around to the idea that, morally, it might be the right thing to do provided it reaches those who need it most.

And, once again no apologies for having my own views but no offence meant!

Good Luck

PS PeterH1- nice to see you’re sticking to the script, in that any view that you don’t agree with is ‘moronic’. Says it all really!

NickOfHail - I agree. I think a windfall tax is inevitable come next set of results.

. . . to add to my holding at this time. There's simply too much uncertainty. I agree, the 8.5% yield looks attractive, but where's the share price going to head from here? I've no confidence either way.

I first bought into this in May 2017 and the highest price I've paid to date is £3.67. My reward for being a (reasonable) long term holder is a 20% reduction in my capital, offset by a 19% return in dividends. So, about breakeven. But all in all not a particularly good investment.

I would agree that the longer income paying stocks are held the better they look.

I try not to compare my income holdings with my growth funds/trusts. They're 2 different animals in my mind. Yes, this has performed better than SMT over the last 6 months, only (!) falling 5% compared to the almost 40% decline in SMT share price. However, an investment here 5 years ago today would have produced a total return of 7.5% to date. The same investment in SMT . . . 149%!

I like a balance, for many reasons, comparison not being one of them. Good luck.

I don't buy the dividend argument. It may have some effect but if $120+ pb oil price and a high value of buy backs can't get the share price much closer to its pre-pandemic level then I'm struggling to see what will!

Gary59 - "I would be interested in what you & other sensible posters consider to be quality companies at this time, thanks & good luck all . . ."

Well, there's a question! I guess it depends on what you're after. Growth, dividends or a bit of both?

Before I give my opinion I would add that I probably know no more than you do with regards to stocks or what's likely to happen from here with regards to global events.

So, you might want to look at LGEN. For a FTSE100 company it bounces around a fair bit but (generally!!) always manages to recover to around the £2.80 mark. It pays a reasonable dividend and at today's price would yield just over 7%.

If, you wanted to diversify a little you could look at Merchants Trust (MRCH). Mainly invested in UK based dividend paying companies. At today's buy price it's yielding 5.3% and has increased its dividend every year for the last 39 years.

The other alternative is to forego chasing dividends and simply invest in the global economy. A couple of options would be L&G International Index and Vanguard FTSE Global All Cap Index. Invest in accumulation version of the fund. I like funds for the simple reason, that once you've taken a position, you can drip feed from as little as £100 into the fund on a regular basis in order to mitigate risk.

Hope this helps. Good Luck.

MarkGo - all good, thanks for asking. Hope all’s well with you.

I agree that I posted something similar some time ago. I must admit that I’m frustrated at the shortfall in share price progress given record profits, the high oil price and recovery in demand.

When I say shortfall I’m measuring today’s sp against it’s pre-pandemic level. Given the factors above I would have expected it to be closer to £5 than £4 per share.

I know some put this down to the dividend reduction. I personally think the market remains sceptical around the future strategy. BP is currently a declining oil producer. I think the market needs some further reassurance around renewables ie costs, profits etc etc etc. Good luck!

So what’s the missing catalyst? High oil price, demand back to pre-pandemic levels, recover record profits, regular buy backs and still the share price languishes 20% below Dec 19 levels.

When you say it will “come good in the end” what does “come good” look like sp wise?

. . . how positive most people are with this share. Oil at $95 pb and the sp sits 20% below it’s pre-pandemic level. That’s on the back of the best set of results for 8 years.

I’ve read here today the “we’re (BP) making money at $65 pb” Can you imagine the sp when oil falls back down to that level? And it will!

licker - judging by market cap share price would be around £3.83 (and falling!) without last 12 months buy backs

"then this gives a worst-case post-Rosneft SP of ~ 350 - 360"

Looking at the latest p&l account I get it around 315p ps!

Rosneft contributed around 23% of the 4th quarter 2021 profits.