FROM AN ARTICLE TODAY -- "The falling stock price explains its mounting yield, currently at more than 7.8%. However, as the stock trades around its five-year low, the yield seems unsustainable.
After slashing dividend payments in 2011 post the Deepwater Horizon disaster, BP has been constantly increasing payouts. Over the last year, BP has been paying $0.60 per share every quarter in dividends, or $2.40 for the year, while it has actually lost $2.49 per share, making its payout ratio negative.
The $31.7 billion cash and cash equivalents as of September 30 which could be used to pay dividends is dwarfed by the $172 billion the company holds in total liabilities. Thus, to maintain its priority of sustaining dividend growth, the company took on $5 billion in long-term debt."
GUESS THE COMPANY SHOULD BE MORE CAREFUL ABOUT WHAT IT BLOWS UP, EH, LONGS ?