BP is a global oil and gas company headquartered in London, United Kingdom. It’s the third-largest energy company and fourth-largest company in the world measured by revenues and one of the six oil and gas “supermajors”.
BP is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading. It also has major renewable energy activities, including bio fuels, hydrogen, solar and wind power.
BP’s name has become infamous of late due to the massive oil spill in the Gulf of Mexico. From an investors point of view this incident shows the risks involved when investing in a major oil company.
BP isn’t the first and won’t be the last major oil company to experience the kind of publicity backlash that BP has suffered of late. Question is, are they a good investment going forward?
What is BP Stock worth Today?
BP is currently trading around $47.00 on the NYSE, which is a secondary listing. The company’s main listing is on the London Stock Exchange (LSE).
This is around half what it was trading before the Gulf oil spill and gives BP a market cap of around $147 billion. Well below other major oil companies and well below its true value. But there are well documented reasons for this.
BP Stock History Chart
BP Stock Price History
BP was trading at around $74 in Jan 08 before the recession and the oil spill. Both these incidents have taken their toll on the share price however. In Feb 09 the price had fallen to $37 due to the recession and a major incident in a Texas refinery, but worse was yet to come.
The incident involving the Deepwater Horizon rig on April 20th, 2010 in the Gulf of Mexico has cost the company dear, not only in terms of reputation but revenues and profits have also taken a hit.
At the height of the disaster the share price had dropped to a low of $28, less than half its value two years previous. The price has shown to be remarkably resilient however, since the disaster the price has recovered to a respectable $46 per share. I guess that shows how much western economies rely on oil.
BP Stock Split History
BP’s stock has been split 2:1 four times in its history. The first was on June 3rd, 1978 when the stock was trading at 61.50 on the previous days trading and closed at 30.25 the day after, resulting in a loss of -1.63%.
The second stock split took place on June 23rd, 1980 with the stock trading at 98.25 on the previous days trading and closed at 48.50 on the following day, resulting in a small loss of -1.27%.
The third stock split took place on June 6th, 1997 with the stock trading at 144.50 on the previous days trading and closed at 73.50 on the following day, resulting in a small profit of 1.73.
The fourth and final stock split took place on October 4th, 1999 with the stock trading at 113.12 on the preceding days trading and closed at 56.63 the day after, resulting in a small profit of 0.12%.
Will BP Stock Split Again?
It’s very unlikely BP will split the stock again in the immediate future, however in the long run when and if the price recovers to around the $100 mark, a split is a distinct possibility.
The board are likely to be keen to reward long suffering shareholders with a split when the company is back to normal trading levels.
Does BP Stock Pay a Dividend?
BP is back to paying dividends again after a small hiatus during the Deepwater Horizon incident. Its last dividend was around 7 cents per share for the quarter. This is around half what it paid pre-disaster but at least it’s a step in the right direction.
Should You Invest in BP Stock?
Shortly after the disaster BP stock was a definite buy, the price was unbelievably cheap and many pension funds increased their holdings significantly. However, the price has now recovered somewhat and it’s less of a bargain than it was.
The price of oil is still high and that benefits BP’s bottom line, they’re also a much leaner company than they once were. But there’s still some fallout from Deepwater Horizon to come, the reputation of the company is still stained, especially in key U.S. markets, there are still court cases to be heard and they’re likely to drag on for many years.
On the plus side, the massive cost of the cleanup has already been covered as have any liabilities that may arise from court action. So the results of these court cases will only have a superficial impact on the share price.
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