Monday, September 13, 2010

BP (NYSE:BP) Dividends to Resume?

The question on many BP (NYSE:BP) shareholders and investors minds when the company will reinstate the dividend.

Incoming CEO Robert Dudley stated near the end of July that the company wasn't going to be quick to jump back into the same "dividend philosophy" they held in the past.

He seems to really be saying that until they get a better picture of overall liabilities, there aren't going to reinstate the dividend. That picture is getting clearer, as Citigroup Inc. (NYSE:C) analyst Mark C. Fletcher said in a meeting he attended where Robert Dudley spoke to analysts, he reportedly said overall claims toward the $20 billion fund are probably going to be less than that amount, and he doesn't see overall claims exceeding $32 billion, or at least they'll be close to that number if they do go beyond it.

A growing number of analysts believe BP will either reinstate dividends in the fourth quarter, or at latest, the first quarter of 2011.

Sanford C. Bernstein & Co. analysts said in a note to clients, “BP’s cashflow position should be just strong enough to support restoration of dividends by the first quarter of 2011, under an $80 a barrel oil price scenario based on estimates. This assumes divestments are completed and the spill costs do not climb much above BP’s $32.2 billion estimate.”

Bernstein added this is based on the assumption BP will be able to successfully sell up to $30 billion in assets over the next 18 months, as they've said their goal is.

1 comment:

Warren Buffett said...

What a waste of time reading this!!!
Dividends will be reinstated in February 2011, end of!