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Here’s Why You Should Add BP Stock to Your Portfolio Now

Zacks

On Mar 6, BP plc BP was raised to a Zacks Rank #2 (Buy).

Why the Upgrade?

Through 2017, BP brought online seven key projects — Khazzan Phase 1, Zohr, Juniper, Persephone, Quad 204, Trinidad Onshore Compression and West Nile Delta – Taurus / Libra — which helped the firm produce record volumes of oil and gas during the October-to-December quarter. In fact, fourth-quarter 2017 production touched the highest mark since the January-to-March quarter of 2011.

BP is also expected to bring online five more upstream developments in 2018. All these projects along with the developments placed online in 2016 will likely help the energy giant add 800,000 barrels of oil equivalent per day to net production capacity by 2020.


Investors should know that ramp up of key upstream projects convinced BP to project higher year-over-year production through 2018. For the January-to-March quarter of 2018, the integrated energy player expects output to remain flat sequentially. Healthy projected output amid the partial recovery in oil price might reward the company with handsome cashflow.

BP has been paying stable dividends to American Depositary Share (ADS) holders for 13 quarters in a row despite volatile crude prices. ADS holders will again receive dividend payments on Mar 29, 2018, as announced by the company along with its fourth-quarter 2017 results, the quantum of which has been maintained. Presently, the company’s dividend yield of 6% is way higher than the 4.2% yield of its industry, courtesy of secure operations.

The integrated energy player’s earnings surprise history is impressive. Over the past year, the stock has rallied 16.8%, outperforming the industry’s 7.6% gain.

Other Stocks That Warrant a Look

A few #1 Ranked (Strong Buy) stocks in the energy space are ConocoPhillips COP, Pioneer Natural Resources Company PXD and Concho Resources Inc. CXO.You can see the complete list of today’s Zacks #1 Rank stocks here.

Headquartered in Houston, TX, ConocoPhillips is a major upstream energy player. The company is expected to witness year-over-year earnings growth of 380% in 2018.

Headquartered at Irving, TX, Pioneer Natural Resources is an upstream energy firm. The company has an average positive earnings surprise of 66.9% for the last four quarters.

Headquartered in Midland, TX, Concho is also an upstream energy company. The firm will likely see year-over-year earnings growth of 73.2% in 2018.

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