Member Info for zac0_4

MarkGo / Compound - I was just about to say the same. Compound's view is from somebody who has bought in to this share at a depressed level. It's a view I don't share. As a long term holder I'm currently sitting on a 30% capital loss. And in return I now enjoy a dividend yield a little over 3%. I watched my entire portfolio capitulate q1/2 last year and most at worst have recovered, some have delivered excellent growth whilst BP still lags.

I accept that oil companies have taken a massive hit, both with declining oil prices and a collapse in demand. My fear is that the market has taken the opportunity to re-rate BP. Let's assume (and I'm not an accountant and nor do I know any more than anyone else on this board) that the $4.7bn profit in q1 is repeated across the next 3 quarters. That would be an annualised profit of close to $19bn. The last time BP delivered anywhere near that was 2018. During that year it had a sp high of 600p and a low of 460p. Maybe the market knows something we don't.

And my guess, MrC, for what it's worth is that we won't see an increase to the dividend for years.

Licker - your argument for a dividend increase has been based on the current oil price increase not future alone. All I said was it would be irresponsible for a CEO to change a 5 year shareholder returns strategy based on an increase in oil price for 5 or 6 months.

I can't exactly remember the figure that was used as the assumed oil price in the strategy plan. I think it was around $55 per barrel. Whilst it is currently higher no CEO will base a change in policy on such a short timescale given that Brent crude was around $50pb at the year end.

licker - no hidden agenda. I'm not aware I've misquoted you on the oil price. Please explain.

licker - you can assume what you want. Just so I'm clear, what is that you're saying? Is the CEO likely to increase the dividend or not?

I'm clear in my view. There will be no increase to the dividend and excess cash will be returned via share buy backs as stated.

I've held a position in BP (and Shell) since 2017. At that time I invested for a healthy dividend along with some capital appreciation if I was lucky.

For obvious reasons my view / situation is now very different. A yield of just over 3% means it is no longer satisfying my income requirements and my capital has depreciated substantially.

I remain a holder but the longer the share price remains depressed the more I'm beginning to think the value of the business, and subsequent share price, has been rerated by the market. I still see some recovery in the share price from here but can't see it reaching pre-pandemic levels for many years.

I will probably have moved on by then.

licker - so you expect BP to change their 5 year income strategy based on an oil price increase over a 5 to 6 month period? Not a chance! And it would be irresponsible if they did.

And as for fresh oil price forecasts . . . well I've seen nothing from BP.

They've clearly stated what they'll do with any excess cash they generate. They'll return at least 60% of it via share buy backs. That's what they're planning to do with it, not increase the dividend!

And what major event has changed?

BP seem to be committed to an aggressive share buy back policy. They would argue it's an additional way to return cash to shareholders compared to dividends. I think I read somewhere that they expect buy-backs this year to match dividends in value. That's around £3bn

Surely it would be better, in the long run, to deploy this cash within the business to accelerate the transition from an IOC to an IEC.

Or could it be that reinvesting the cash in a business which produces low returns on sales is seen as a poor investment?

Thomo1968 - I'm more than happy with the return from (most of!) the funds I'm invested in. They all took a hit at the start of the pandemic but have more than recovered over the last 12 to 15 months or so which is more than can be said for my BP and Shell holdings.

The acid test here for me is when sales volumes recover to pre-pandemic levels. If the share price, at that point, hasn't moved significantly north from here then my cash will be redeployed in one of my strong performing global equity funds.

Good Luck.

Peteeboyd!!

Peterborough- not a naysayer simply a realist!

thank you!!!!!!

Wheremymoneygone - "that's how many feel when dividend hike is mentioned weekly" . . . or even daily . . . or even hourly!

Why people won't believe what BP have stated with regards to shareholder returns is beyond me!

licker - buy backs do not increase the dividend. In theory they increase shareholder value by reducing the number of shares in circulation so driving up the share price.

'share price has been made low so that buybacks can be done' - made low by who?

'lack of buyback activity' - what about the $500m spent last quarter?

And I see you think RDSB will get back to 2019 dividend levels in the near future. Again I strongly disagree. But that's just my opinion.

Gavster-NBC - the policy's laid out. So when, in your opinion, will we see a dividend increase?

The oil price has been higher than the estimate in their plan for how long? 3 months?

Their priority, with regards to dividend payments is to have it set at a sustainable level so that it can be maintained over the long term.

In my opinion we're years away from BP even discussing any change to the dividend policy.

If BP made a statement saying they'd increase the dividend then everyone would believe them.

Why then, don't people believe them when they say the dividend is fixed and excess cash will be returned to shareholders via buybacks?

Razu - "We are not saying that the ftse has been casino like for 20 years" . . . who's we?

"most people understand that it has become casino like post covid" . . . what exactly do you mean?

Surely you're not trying to say that retail investors have any influence on the day to day movement of ftse100 company share prices, are you?