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Is BP Ready for Lower Oil Prices?

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Part 9
Is BP Ready for Lower Oil Prices? PART 9 OF 17

Behind BP’s Dividend Payment: Analysts’ Estimate for 4Q17

BP’s dividend per share

BP’s (BP) dividend payments have stayed steady over the past few years. For 3Q17, BP has announced a gross dividend of $0.60 per share (American depositary shares), which has remained steady since 3Q15. The dividend was announced on August 1, 2017, and will be paid on September 22, 2017.

Wall Street analysts expect BP’s dividend payment to stay flat on a QoQ (quarter-over-quarter) basis in 4Q17, holding at to $0.60 per share. Analysts don’t anticipate any rise or fall in these dividend payments, likely because of the mixed trend in BP’s Upstream and Downstream segments.

Behind BP’s Dividend Payment: Analysts&#8217; Estimate for 4Q17

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Oil prices, which impact BP’s Upstream segment heavily, have declined QoQ in 3Q17, but refining margins, which affect the Downstream segment heavily, have risen QoQ in 3Q17.

Brent fell from $50 per barrel in 2Q17 to $49 per barrel in 3Q17 QTD (quarter-to-date). BP’s global RMM (refining marker margin) rose from $13.8 per barrel in 2Q17 to $14.8 per barrel in 3Q17 QTD. A change of $1 per barrel in Brent prices changes BP’s pre-tax placement cost-operating profit by $340 million annually. But a change of $1 dollar per barrel in RMM changes the operating profit by $500 million annually.

Dividend yields

BP’s current dividend yield stands at 6.5%, which has fallen from 7.2% in 3Q15. The fall in yield is due to a rise in BP stock price during that period.

During the same period, Chevron’s (CVX) dividend yield fell from 4.8% in 3Q15 to its current level of 3.9%. Global players Total (TOT) and Statoil (STO) saw their dividend yields fall from 5.4% and 5.7%, respectively, in 3Q15, to their current levels of 5.1% and 4.7%, respectively.

But ExxonMobil’s (XOM) dividend yield increased from 3.7% in 3Q15 to its current level of 3.8%. Royal Dutch Shell’s (RDS.A) dividend yield also rose from 6.2% to 6.6%. The SPDR S&P 500 ETF’s (SPY) dividend yield has risen from 1.8% in 3Q15 to its current level of 1.9%.

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