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Why It's Worth Adding BP Stock to Your Portfolio Right Away

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BP plc’s (BP - Free Report) upbeat prospects make it a promising pick.

The company currently has a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities for investors.    

Let’s delve deeper to analyze the factors that make this British integrated energy player an attractive investment option.

The company has been gaining on a strong portfolio of upstream projects. Since 2016, BP has brought 15 key upstream developments online, including Atoll Phase 1, Shah Deniz 2 and Taas-Yuryakh oil expansion in Russia.

Apart from starting three more projects in 2018, BP is planning to bring online 10 more key upstream developments beyond 2018. All these developments are helping the British energy giant to boost production by 900 thousand barrel of oil equivalent per day (MBOE/D) by 2021. 

Being a leading producer of oil and natural gas, BP is well placed to capitalize on strengthening oil prices and rising natural gas demand for clean energy needs. It is to be noted that through first-half 2018, BP’s worldwide production comprised 1,267 thousand barrels per day (MB/D) of liquids and 7,352 million cubic feet per day (MMCF/D) of natural gas.

Importantly, owing to an integrated business model, the company has been steadily rewarding investors with handsome dividend yield. BP’s current dividend yield of 5.2% is higher than 4.2% of the stocks belonging to the industry. Notably, over the past 10 years, the company has been consistently paying higher dividends than the broader industry.  

BP’s pricing chart is impressive as the stock has rallied 22.2% over the past year, outperforming the 14.1% collective gain of the stocks belonging to the industry.

 

Other Stocks to Consider

Other prospective players in the energy space are Shell Midstream Partners LP (SHLX - Free Report) , Oasis Midstream Partners LP (OMP - Free Report) and Petroleo Brasileiro S.A. or Petrobras (PBR - Free Report) . All the stocks sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.  

Shell Midstream Partners has an average positive earnings surprise of 7.9% for the last four quarters.

Oasis Midstream will likely see earnings growth of 323.3% and 60.1% in 2018 and 2019, respectively. 

Petrobras’ bottom line beat the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 10.4%.

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