The Motley Fool

BP plc’s Defeat Doesn’t Put Me Off

Some companies naturally have more news flow than others.

Indeed, BP (LSE: BP) (NYSE: BP.US) seems to be one of the stocks with the largest amount of news flow, perhaps because it is still embroiled in arguments concerning compensation payments for the Deepwater Horizon tragedy, where 15 people tragically lost their lives in 2010.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

The latest piece of news flow was not good. BP was again rebuffed in its attempt to end compensation payments under the original settlement signed in 2010, as a judge ruled that there was “no credible evidence” to back-up the company’s argument that many of the claims have been fraudulent.

In response, BP said it will continue to highlight what it believes are fraudulent claims, although the decision looks unlikely to be overturned.

So, this news flow will inevitably put a lot of investors off investing in BP. Certainly, I can see why. BP is now likely to be required to continue to make payments and it could lead to further asset sales in future. This would shrink BP’s asset base, meaning profits are likely to be lower in future years and shares could struggle to outperform in the short to medium term at least.

Why, then, would you want to buy shares in the company?

Indeed, although the outlook may appear rather bleak, I believe that many of the problems are priced-in. Shares are very cheap at current levels, with BP trading on a price-to-earnings (P/E) ratio of just 11. This compares very favourably to both the FTSE 100 and the oil and gas industry group, which trade on P/Es of 15 and 12.5 respectively.

Furthermore, the market is forecasting very impressive earnings per share (EPS) growth over the next two years, with growth of 30% expected for 2013 and 16% anticipated in 2014. This puts BP on a price to earnings growth (PEG) ratio of around 0.5, indicating that shares are very cheap at current levels.

In addition, BP’s yield remains above-average. Shares currently yield an impressive 5.1%, with dividends per share expected to increase to around 25.5p in 2014. This puts BP on a forward yield of 5.75%, making it a viable option for income-seeking investors like me who are concerned about the twin effects of low savings rates and the potential for high inflation.

Of course, you may already hold BP or be looking for other potential yield plays. If you are, I would recommend you take a look at this exclusive report that details The Motley Fool’s Top Income Share.

It is completely free and without obligation to view the report and it could be just what your portfolio needs. Click here to take a look.

> Peter owns shares in BP.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.