BP plc Could Help You Retire Early


As the January sales have drawn to a close on the UK high street, the UK stock market seems to be offering up not only a January sale, but a February sale, too!

Indeed, the FTSE 100 fell by 3.5% in January alone, with many large caps becoming very attractively priced in the process.

However, at the time of writing, the FTSE 100 has fallen further and is now down another 0.9% since the end of January.

One sector that continues to offer great long-term potential for bargain-seeking investors is Oil & Gas. Sure, it has been hugely unloved for a good while and the share prices of stocks in the sector have disappointed as doubts are raised about the medium to long term demand for oil, as the US shale gas revolution moves onwards and upwards.

However, one company in this space that still seems to offer a good investment case is BP (LSE: BP) (NYSE: BP.US). As you are well aware, it has experienced huge problems in recent years and has rarely been out of the news headlines. Furthermore, it has experienced (and continues to experience) weak market sentiment, as investors seem unsure about its turnaround potential.

Looking at the future, though, highlights the great possibilities that BP could offer and, for investors with one eye on retirement, BP could be a winner.

Indeed, BP is forecast to deliver earnings per share (EPS) growth of 16% in 2014, which is considerably above the mid single-digit average growth rate of the rest of the market.

Of course, full-year results from 2013 (released this week) were very mixed and, certainly, BP is yet to recover from the Deepwater Horizon oil spill, which decimated profits to a level from which it will take a long time to make up lost ground. However, the forecast of double-digit bottom line growth in 2014 is still mightily impressive.

Best of all, though, is that BP currently trades on a forward price-to-earnings (P/E) ratio of just 9. Comparing this to the FTSE 100’s P/E of over 13 highlights just how cheap BP is and how much of an impact it could yet make on your retirement plans.

Of course, BP is not the only company that could help you retire early. With this in mind, The Motley Fool has written a FREE guide called 5 Shares To Retire On, which is available exclusively to you, our readers.

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> Peter owns shares in BP.