Shares in oil giant BP bounced this week after it promised to “shower its shareholders with higher dividends and share buybacks”, says Jillian Ambrose in The Guardian. Thanks to unexpectedly high profits of $2.76 billion for the three months to 30 June, BP will lift its dividend payments while buying back stock worth $1.75 billion over the next quarter. This will bring its total buybacks for the first half of the year to $3.5 billion and $7 billion for 2024 as a whole. BP has paid out a total of $14.8 billion to shareholders since June 2023.
All this good news is certainly a much-needed “boost” for BP’s CEO Murray Auchincloss as he “attempts to rebuild... confidence following the abrupt resignation of Bernard Looney”, says Emma Powell in The Times. Auchincloss hopes to deliver “a simpler, more focused and higher-value company”. He has set out plans to save at least $2 billion in costs by the end of 2026 and has frozen external hiring, except for frontline roles. However, investors have yet to be convinced. The company’s shares “have lagged both domestic and international rivals”.
BP's future looks bright
BP’s future prospects also look auspicious, especially since its strong results have, in addition, enabled it to take a “further bite out of its net debt pile, which now sits at $22.6 billion”, says Hargreaves Lansdown’s Derren Nathan. In addition, the group “has its eye firmly on high-returning initiatives”, having given the go-ahead for the fully owned deepwater Kaskida hub in the Gulf of Mexico, which should add 80,000 barrels per day of production once it’s up and running.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
At the same time, the amount of energy sold through its growing EV-charging network has doubled so far this year. This “measured approach” leaves BP “well placed” to drive shareholder distributions, “while continuing to build out a strong position as an integrated energy company”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
-
The top stocks in the FTSE 100After a year of strong returns for the UK’s flagship index, which FTSE 100 stocks have posted the best performance in 2024?
-
A junior ISA could turn your child’s pocket money into thousands of poundsPersuading your child to put their pocket money in a junior ISA might be difficult, but the pennies could quickly grow into pounds – and teach them a valuable lesson about money
-
Share buybacks rise in the UK – what effect will it have?Share buybacks are gaining popularity in the UK – good news for investors
-
India's stock market drops - why it's thrown investors into frenzyNifty 50, India's stock market index, has dropped 8% from a September record amid concerns of an economic slowdown and foreign investors pulling out
-
Is now the time to buy Marshalls?Former market darling Marshalls, a landscaping and building products supplier, looks too cheap. Is it time to buy this once-admired stock?
-
Top UK stocks with healthy cash flows and dividend yieldsThree promising UK stocks according to Alan Dobbie, co-manager, Rathbone Income Fund
-
How to save the dying UK stock marketThe UK stock market is in long-term decline. To fix that, we must first recognise why equity markets exist and who they should serve
-
James Halstead is a family firm going cheap but should you buy?James Halstead will rebound from a weak patch, while tax changes would be a buying opportunity
-
Babcock: an overlooked defence investmentDefence stocks have outperformed this year, but Babcock has been left behind
-
Shares in luxury goods companies take a hit – will they recover?Luxury goods companies have run into trouble, and the odds of a rapid recovery have receded. What next?
