The Covid-19 outbreak and the recent decline in oil prices have delivered a one-two punch to investors worldwide. As the realities of ‘life under lockdown’ begin to bite, many of the stock market’s ‘go-to’ high-yielding companies have either taken an axe to their dividend pay-outs… or worse, opted to suspended them altogether – for the near-term at least. This decline in oil prices is likely to hit BP’s cash flows and profits hard in the near term. Although consumers are likely to enjoy such low oil prices at the pump, it is a different story for oil majors. Otherwise, the company may have to incur debt to be able to pay the dividend. Fortunately, The Motley Fool is here to help…, Our analyst has unearthed what he believes could be a very attractive option for income- seeking investors – a company that, in his view, boasts a ‘reliably defensive’ business model, combined with a current forecast dividend yield of 4.2% to boot!*. As of the result of the stock price decrease, BP shares now have an enticing dividend yield of around 13%. Is this high yield sustainable though? Nasdaq All rights reserved. For example, on March 23, another oil major Shell Royal Dutch Shell (NYSE:RDS.A, NYSE:RDS.B) announced that in order to reinforce its “business resilience and financial strength,” the group would slash costs and suspend its share buyback program. Article printed from InvestorPlace Media, https://investorplace.com/2020/03/dividend-bp-stock-long-term/. And if the price of oil were to stabilize and even increase in the rest of 2020, BP shareholders would likely benefit from capital gains, too. Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article. Share prices of oil companies like BP (NYSE:BP) have simply crashed during this violent market pullback. Many investors pay special attention to oil companies as they tend to pay stable dividends, an important aspect of so many portfolios. In return, Saudi Arabia not only slashed selling prices for its oil but also decided to up oil output levels. 1125 N. Charles St, Baltimore, MD 21201. Finally, the company has a 19.75% stake in Rosneft (PINK:RNFTF), the Russian state oil producer. BP Dividend History. As of the result of the stock price decrease, BP shares now have an enticing dividend yield of around 13%. And in case of a bailout in the U.S. as well as in other countries such as Canada, BP shares would likely see a fast move upwards. All rights reserved. She especially enjoys setting up weekly covered calls for income generation. This drop in profitability is likely to have negative implications for the dividend. BP shares: I expect a dividend cut in 2020. It appears that a wide range of analysts agree with me. Earlier this week, the FTSE 100 company said it’s expecting to post second-quarter, post-tax, non-cash impairment charges and write-offs of between $13bn and $17.5bn. BP is taking the shift seriously. And this price war between Saudi Arabia and Russia — two of the world’s biggest oil producers — have pushed oil prices to the current levels. But many analysts actually regard it as a proxy price war between the U.S. and Russia. 3 Reasons to Inject Your Portfolio with Sorrento Therapeutics, Matt McCall and the InvestorPlace Research Staff, Buy Piedmont Lithium Stock Now for Unique EV Exposure, Louis Navellier and the InvestorPlace Research Staff, Trump vs. Biden: Stocks to Buy No Matter Who Wins the White House, 7 Hot Stocks Offering Triple the Upside Now, Despite Its Huge Run-Up, Hyliion Stock is Still a Long-Term Buy, 7 Elections Stocks You Definitely Want To Avoid Leading up To the Big Vote. However, I also believe that the current BP share price has already mostly discounted such a potential future dividend cut.

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