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BP Looks an Attractive Investment Bet Right Now: Here's Why

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·3 min read
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  • CL=F
  • BP
  • WLL
  • CLR
  • CPE

BP plc BP has witnessed upward earnings estimate revisions for 2021 and 2022 in the past 30 days. The stock, sporting a Zacks Rank #1 (Strong Buy), is likely to see earnings growth of 323.1% this year.

What's Favoring the Stock?

The price of West Texas Intermediate crude is approaching the $80-per-barrel mark again, highlighting a substantial improvement from the negative territory hit last April. The massive crude recovery has been driven by the rapid and widespread rollout of coronavirus vaccines.

The oil price positive trajectory is definitely a boon for BP’s upstream operations. The improving oil price scenario and increasing daily oil equivalent production volumes are aiding the energy giant’s bottom line. BP added that the target of adding a net production of 900 thousand barrels of oil equivalent per day by 2021 from key new projects has been delivered.

BP is expected to gain from the refining business as well. The integrated energy player has a significant portion of its refining capacities in the United States. In the country, BP operates feedstock-advantaged and sophisticated refineries. The refineries are connected to strong logistics and fuels infrastructure. Thus, with a considerable presence in the United States, the energy major is well placed to capitalize on the rising fuel demand, backed by the reopening of the economy and wider distribution of vaccines.

BP is strongly focused on returning capital to shareholders. The integrated player recently announced that it intends to execute an additional $1.25 billion of share repurchases before declaring results for the December quarter. BP continues to anticipate that it will buy back $1 billion shares every quarter, considering the Brent crude price at $60 per barrel.

On the dividend front, BP projects a hike in annual dividend per ordinary share of 4% through 2025.

BP p.l.c. Price

BP p.l.c. Price
BP p.l.c. Price

BP p.l.c. price | BP p.l.c. Quote

Other Stocks to Consider

Other prospective players in the energy space include Whiting Petroleum Corporation WLL, Continental Resources, Inc. CLR and Callon Petroleum Company CPE. While Continental Resources carries a Zacks Rank #2 (Buy), Whiting Petroleum and Callon Petroleum sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Whiting Petroleum is a leading upstream energy company and is the top producer of crude oil in North Dakota. With oil price improving at a healthy pace, Whiting Petroleum expects to persistently generate handsome cash flows while maintaining a healthy balance sheet.

Headquartered in Denver, CO, Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, WLL has gained 176.7% year to date, outpacing the 106.1% improvement of the composite stocks belonging to the industry.

Continental Resources is also a leading upstream energy company having proven reserves in North Dakota and Oklahoma. The oil inventories of Continental Resources are among the best in the industry.

Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Considering the price chart, CLR has gained 189.9% so far this year, outpacing the 106.1% improvement of the composite stocks belonging to the industry.

Callon Petroleum is also a leading exploration and production company with a strong presence in prolific unconventional resources that comprise Permian Basin and Eagle Ford Shale play.

CPE has witnessed upward earnings estimate revisions for 2021 in the past 30 days. Looking at the price chart, Callon Petroleum has gained 339.1% year to date, outpacing the 106.1% improvement of the composite stocks belonging to the industry.


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BP p.l.c. (BP) : Free Stock Analysis Report

Continental Resources, Inc. (CLR) : Free Stock Analysis Report

Whiting Petroleum Corporation (WLL) : Free Stock Analysis Report

Callon Petroleum Company (CPE) : Free Stock Analysis Report

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