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BP: trimming its sails is second nature

Better long-term free cash flow break-even than Shell. Risks include very thin cover, high debt levels and energy prices.
July 14, 2017

Policy: “To grow sustainable free cash flow and distributions to shareholders”

Yield: 6.95 per cent

Payment: Quarterly, declared in dollars, paid in sterling

Last cut: 2010 (cancelled and discontinued after Deepwater Horizon spill)

447p

On average, the analysts who cover BP (BP.) expect a lot of the integrated oil giant over the next three years. According to Bloomberg consensus forecasts, revenues will rise by 30 per cent in 2017 to $238bn (£184bn) and to $272bn by 2019, while pre-tax profits are set to almost triple this year to $10.3bn, before growing at an average of 25.6 per cent in both 2018 and 2019. By that point, net debt will start to fall and projected dividends imply a forward yield in line with the existing 7 per cent rate. 

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