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Here’s Why You Should Add BP to Your Portfolio Right Away


On Nov 7, BP Plc BP was upgraded to a Zacks Rank #2 (Buy).

Why the Upgrade?

Along with third-quarter 2017 results, BP announced expectations of a sequential improvement in production during fourth-quarter 2017 on project ramp-ups.

The British energy giant commenced natural gas production at the Khazzan field in Oman. The project, expected to have an inventory of 300 drilling wells, is the largest start-up by BP in 2017. Also, it is the sixth project start-up among the seven new this year.

All the projects are likely to take BP closer to its target of adding 800,000 barrels of oil equivalent every day by 2020.

We appreciate the company’s renewed share repurchase program, reflecting BP’s improving financial strength on the back of a healthy crude pricing scenario. The integrated energy player will likely start repurchasing stocks in the October-to-December quarter of 2017. Also, the company’s current dividend yield of 5.7% is higher than 4.1% of the Zacks Oil International Integrated industry.

Moreover, the company’s pricing chart is impressive. Year to date, BP has rallied 10% against 5.7% gain of the industry. Also, efficiency of the company’s drilling operations is improving as reflected by the steady decline in non-productive time since 2012.

Other Stocks to Consider

A few better-ranked energy players are Par Pacific Holdings Inc. PARR, China Petroleum & Chemical Corp., or Sinopec SNP and Northern Oil and Gas, Inc. NOG. Par Pacific and Sinopec sport a Zacks Rank #1 (Strong Buy), while Northern Oil carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, Par Pacific managed to beat the Zacks Consensus Estimate in three of the last four quarters, the average earnings surprise being 195.26%.

Headquartered in Beijing, Sinopec is a leading integrated energy player. The company will likely witness year-over-year earnings growth of 59.1% in 2017.

Based in Minnetonka, MN, Northern Oil is an upstream energy player. The company’s 2017 revenues are estimated to grow 44.1%.

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