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BP p.l.c. Message Board

  • TxTraderMan TxTraderMan Feb 2, 2010 11:51 AM Flag

    Dividend will be cut, BP going to 40's

    You can't continue with a payout ratio well over 100% and not cut the dividend sometime in the future! nuff said.

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    • Hey, I've already disclosed I'm not short, I'm only a prudent investor waiting for the 40's to invest. I never overpay for stock. I'm patient and will wait for my price. Right now, BP is simply overvalued, overbought and over hyped as a buy. The oil price normally tops in FEB of each year, so let's see what happens to the stock price

    • I'm not a taxman, I'm a short term trader. I would keep doing what your doing, and limit your risk with a stopless.

    • BP now going downhill faster than Gold medal winner Lindsay Vonn! Ha

    • taxman,

      I am looking to diversify and like stocks that have "plunged" or are falling, because they seem to always go back up.

      I own a REIT, RSO that pays a 16% dividend (one year visibility), although it keeps going up in price and, of course, that lowers the dividend rate.

      RSO has never missed (only been around a few years) during a time that included the meltdown years - so, I think it is very safe.

      My question: what are the advantages of buying BP over RSO?

      Is it that you just believe it is a much safer place for your money (reason enough), or are there other concerns?

      I know, for example, that RSO's dividends are taxed as ordinary income. I assume BP's dividends are taxed at the capital gains rate?

      TIA

    • Still going to the 40's, no doubt about it. When the Greeks default or moody's cut Greeks ratings, that will do it. Then you buy in the 40's. You buy low and sell high. It's that simple. You don't make money buying high!

    • Not true. As I said you have no credilbilty.

    • CEOs are nothing more than glorified cheerleaders! They don't say anything negative about the company, it's always we are going to be great, greater and the greatest. Remember Bernie Ebbers with Enron?

    • What's going to happen to those cash flows when the Euro needs propped up with higher taxes? BP stock is only worth the sum of it's future cash flows. You talk like those cash flows that pay that huge divi are a guarantee. This stock is likely to have a tripple whammy from higher taxes, lower oil prices and lower refinery margins. I worked in the oil patch for almost 30 years and have seen it happen several times. It will happen again! Wait for the 40's to invest, it will get there. You only make money in stocks by buying low and selling high.

    • Dividend cut with oil at $80?

      Refining and marketing have been a 10 year depression. They get those firing on all cylinders with an economic rebound and the stock will be $100 easy...

      Even with depression level profits the dividend is fully funded with cashflows...

    • ky1es@ymail.com ky1es Feb 17, 2010 7:41 PM Flag

      YE 2009 financials show continued borrowing to finance capex and the dividend payout. At some point capex or dividend decrease or cash flow increases. Cutting capex is like cutting your own throat in E&P. BP's investment in nat gas is the gamble, if it pays off thru economic recovery shareholders win. If not Hayward cuts the dividend and loses his job.

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BP
41.74-0.44(-1.05%)Mar 3 4:05 PMEST

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