BP Stock Report

2-Year Price History

Ockham's Rating

Rating specific information requires Premium Access.
Buy Now or Take the Tour.

BP Revenue

As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, BP the high and low end of the Price to Sales per share ratios are 0.88x and 0.62x respectively.

Notice that BP's current Price to Sales per share ratio is 0.54x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $47.06, BP is 28% below where we would expect to see it. This will beneficially factor into our final analysis of BP as it is not often that this stock sinks to these levels.

BP Cash Earnings

As the old saying goes, "Cash is King!" However, we prefer to capture a few other items within our analysis to identify "cash earnings". Nevertheless, an analysis of Cash Earnings is absolutely pivotal to assessing a company's value, and currently BP is significantly below its historical average multiple of Cash Earnings. Looking at the last 10 years we can get a good understanding of what investors have grown to expect from BP. For example, BP's Cash Earnings ratio per share has fluctuated between 5.83 and 8.29 over this historical timeframe. This range is based upon a proprietary weighted methodology at Ockham, but can clearly show an investor where BP is with respect to prior business periods.

So with BP's current price (latest close of $47.06) and most recent level of Cash Earnings reported, we see significant opportunity from a value perspective. At its current price level, BP is 36% below its average level of Price to Cash Earnings on a historical basis. This means that investors were willing to pay for a much higher stock price than currently for the same level of Cash in the past, on a relative basis. There are a couple of important things to remember, however. First, value doesn't exist in a vacuum. So if the market doesn't recognize this value, even a great disparity in Price to Cash Earnings cannot force an immediate stock price reaction. Second, patience is key when looking at securities that have reached these levels of Price to Cash Earnings versus their historical norms. So be patient with BP.

BP Dividends

When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for BP to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.

The estimated annual dividend for BP is $3.36 producing a current dividend yield of 7.14%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from BP against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from BP over previous years was 9.97% while the lowest dividend yield was 2.23%. BP’s current dividend yield is therefore significantly higher than its median dividend yield historically. In fact, the current yield is 17.05% above the median which weighs very positively on our analysis of BP.