The BP share price climbs on dividend announcement

The BP share price is up following the announcement of the latest quarterly dividend. But will the 2020 cuts be reversed?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The BP (LSE:BP) share price saw a slight bump in performance following the announcement of its next interim dividend. Existing shareholders on the record since 13 August are set to receive 3.95p per share on 24 September.

There may be some discrepancy between the dividends received for shareholders of the British listing compared to the American listing. This is because the payout is actually being issued in US dollars. As a result, the exchange rate is likely to fluctuate between the date of the announcement and 24 September.

The BP share price has its risks

Will the BP dividend cut be reversed?

In 2020, the firm reported a $20.3bn (£14.7bn) loss. As the pandemic forced governments to order strict lockdowns worldwide, most vehicles remained parked at home and many businesses using BP’s product closed down temporarily. Consequently, the collapsing demand for fuel, sent oil prices plummeting, taking the BP share price with it. In order to maintain the firm’s financial health, the management team decided to cut quarterly dividend payments in half last August.

Since then, oil prices have recovered. And according to the latest interim report, the financial performance of BP has improved drastically. Operating income for the first half of 2021 came in at $8.25bn versus a loss of $21.9bn in 2020 and a gain of $4.9bn in 2019. Despite this performance, there has yet to be an official confirmation of whether the dividend cut will be reversed.

Investors are estimated to receive a total dividend of 21.84c by the end of 2021. Based on today’s exchange rates, that is the equivalent of 15.84p per share.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

With a spare £500 I’d buy these UK shares

A financial services giant, a FTSE 250 distributor, a FTSE 100 tech stock, and a gold miner are on the…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Should I buy this defensive FTSE 100 stock for growth and returns?

This Fool takes a closer look at a FTSE 100 stock to see if it could boost his holdings via…

Read more »

Young female analyst working at her desk in the office
Investing Articles

I robbed Mr Market of this cheap FTSE stock!

This FTSE 250 stock has crashed by almost 30% in six months. But I recently bought into this battered business…

Read more »

Mature people enjoying time together during road trip
Investing Articles

3 reasons I’m backing NIO shares to soar!

NIO shares have bounced up and down this year. But where will the share price go next? My bet is…

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

Up 300%, is the Hurricane Energy share price an opportunity too good to miss?

This Fool looks at why the Hurricane Energy share price has soared in the past 12 months. Should he buy…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

The BT share price crashes 20% in a month. Buy now?

The BT share price has crashed by almost a fifth since coming close to £2 on 12 July. After this…

Read more »

A pastel colored growing graph with rising rocket.
Investing Articles

How I’d invest £1,000 in growth shares today to target £5,000 in a decade

Our writer reckons he could do well by choosing the right growth shares today and holding them in his portfolio…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

How passive income from stocks can speed up early retirement

By investing patiently over the years, buying quality shares has given me enough passive income to retire 10 or even…

Read more »