BP under pressure from hedge fund to ditch clean energy strategy BP

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There are risks from global energy markets for BP shares, but the stock does look cheap right now. Plus, it’s a leader in the oil and gas sector when it comes to dividends. However, it only manages about $150m across a dozen or so companies, meaning it does not have the financial might to force BP into a shareholder vote. Although notoriously difficult to predict, if oil prices do drift lower this year, that could be a significant headwind for growth in the BP share price. That’s especially true in light of BP’s latest quarterly profit of $3.3bn, which was below the consensus City forecast of $4bn. Turning to the macro backdrop, BP’s fortunes are intrinsically linked to oil prices.

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  3. Many analysts have trimmed their crude price forecasts for 2024 due to stagnating global demand coupled with rising supply from the US, Libya, and Norway.
  4. With a potentially long runway ahead, energy stocks could still represent positive value…
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  6. The International Energy Agency in 2021 said that no new oil and gas fields should be drilled if the world is to limit temperature increases.

Enter your email address below to receive our daily newsletter that contains dividend stock ideas, ex-dividend stocks, and the latest dividend investing news. Enter your email address below to receive the DividendStocks.com newsletter, a daily email that contains dividend stock ideas, ex-dividend stocks, and the latest dividend investing news. Van Baal questioned whether Bluebell would gain much shareholder support, and argued that BP’s share price under performance versus peers was related to its decision to cut its dividend in 2020. BP’s shares traded at 466p on Monday, valuing the company at £79bn. It started it’s major expansion into a truly global player with the acquisitions of US concerns Amoco and Atlantic Richfield.

BP needs a new chief executive not a slower strategy towards net zero

Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. As of today, Blackstone Inc currently has a 12-month trailing dividend yield of 2.62% and a 12-month forward dividend yield of 2.64%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Blackstone Inc’s annual dividend growth rate was 37.00%. Extended to a five-year horizon, this rate decreased to 15.20% per year.

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Forecast dividend cover of 2.9 times earnings indicates a robust margin of safety. In addition, the company has a higher dividend yield than fellow FTSE 100 company Shell as well as major US energy stocks like ExxonMobil and Chevron. BP is under pressure from a hedge fund to ditch a strategy that will see it cut its oil and gas output in favour of investing in clean energy.

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Chevron (CVX 0.31%) is one of the largest energy companies on the planet, sporting a massive $270 billion market cap. It competes with integrated majors like ExxonMobil (XOM -0.41%), Shell (SHEL 1.86%), BP (BP 0.09%), and TotalEnergies (TTE 0.41%). Blackstone Inc has maintained a consistent dividend payment record since 2007. Below is a chart showing annual Dividends Per Share for tracking historical trends. The Motley Fool UK has no position in any of the shares mentioned. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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See Best Monthly Dividend Stocks Model Portfolio for our top monthly income ideas. The most recent change in the company’s dividend was an increase of $0.0396 on Tuesday, August 1, 2023. “We don’t think responsible shareholders will allow a conservative investor to slow down a transition that is already moving far too slowly,” he said. Mark van Baal, head of Dutch activist group Follow This, has in recent years forced shareholder votes at BP, Shell, Chevron and ExxonMobil calling for stronger emissions reduction targets. Furthermore, the company currently has an EV/EBITDA ratio of just 2.58. Generally, a number below 10 is a good marker of a potentially attractive investment.

Although this transition is likely to take decades, Chevron and ExxonMobil have both chosen to stick to their oil and natural gas strengths, if you will. They aren’t exactly shoving their heads in the sand, but they also aren’t moving aggressively to transition with the world. That’s despite a strong recovery from the pandemic, as the company benefitted from rising wholesale energy prices following Russia’s invasion of Ukraine. The strong performance was driven by strong refining margins, “exceptional” oil trading performance as well as higher fuel prices, although gas trading was weaker, BP said. BP brings the second quarter profit tally for the top Western oil and gas companies to $59 billion after rivals including Exxon Mobil and Shell reported record earnings last week.

However, it’s facing pressure from activist hedge fund shareholder Bluebell Capital Partners to change tack and stick to traditional hydrocarbon projects. Its underlying replacement cost profit, its definition of net earnings, reached $8.45 billion in the second quarter, the highest since 2008 and far exceeding analysts’ expectations of $6.8 billion. The company also increased its share repurchases plan for the current quarter to $3.5 billion after it bought $4.1 billion in the first half of the year.

Bluebell’s calls for a change in strategy will face opposition from BP’s leadership and also from environmentalists, many of whom argue that the company is still not doing enough to cut emissions. The International Energy Agency in 2021 said that no new oil and gas fields should be drilled if the world is to limit temperature increases. Founded in 1993, The Motley Fool is a financial services beaxy review company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice.

Learn from industry thought leaders and expert market participants. Generate fixed income from corporates that prioritize environmental, social and governance responsibility. Add BP plc to receive free notifications when they declare their dividends. Please log in to your account or sign up in order to add this asset to your watchlist.

Those taxes can be claimed back come April 15, but it complicates your tax preparation, and there’s a cap on the total amount you can claim. So TotalEnergies, despite a higher yield, isn’t necessarily a better choice. Oil prices have fallen from their peak after Russia invaded Ukraine.

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