BP Stock Has Fallen 0.7% but Outperformed Total and Suncor


Jun. 17 2019, Updated 10:14 a.m. ET

BP stock returns

BP (BP) stock has fallen 0.7% in the past month since May 13. Total (TOT) and Suncor Energy (SU) stock have fallen by 0.8% and 2.9%, respectively. BP stock has also underperformed the S&P 500 Index indicator, the SPDR S&P 500 ETF (SPY). The ETF has increased by 3.0% in the same period. Total (TOT) and Suncor (SU) have also underperformed the equity market.


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BP’s moving averages

On May 13, 2019, BP’s ten-day moving average (or DMA) stood 3.0% below its 30 DMA. However, now BP’s ten DMA stands 0.9% below its 30 DMA because of a 4.6% fall in BP’s 30 DMA. Thus, the gap between both DMAs has narrowed.

How is BP stock positioned after its recent fall?

BP stock trades at a forward PE of 10.8x, below the peer average of 12.3x. Total (TOT) and Suncor (SU) also trade below average at 9.0x and 12.2x, respectively. The lower valuations that the market accords to BP could be due to its higher debt. Plus, BP’s earnings per share are expected to fall by 8% in 2019, whereas peers’ earnings are expected to rise by an average of 2%. Total (TOT) and Suncor’s (SU) earnings are estimated to increase by 7% and 26%, respectively, in 2019. Nonetheless, BP has a strong upstream projects pipeline expected to bring in volumes growth.

BP’s current dividend yield stands at 6.0%, above the peer average of 5.0%. Plus, BP is repurchasing shares to offset the scrip dilution. Overall, BP stock has fallen, resulting in a higher dividend yield and lower valuation. The gap between the stock’s moving averages has narrowed, which is a good sign.


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