Bp Plc Stock A Buy Or Not

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Bp Plc Stock A Buy Or Not

Bp Plc Stock - A Buy Or Not?

For UK investors, it is definitely not easy to ignore a giant like BP plc, as it is a big player in the oil sector. Also, the BP stock looks cheap when we compare it with the US oil companies.

With that in mind, it's totally normal to think about buying the BP plc stock. But, is it the right time to buy or not? Let's explore!

Bp Valuation Looks Attractive

BP plc is an oil company which means they can't control their product's price. So, there's not much the BP can do to set itself apart from the competition.

But the company can extract oil at a much lower cost than others. So in that regard, BP is at an advantage, and this puts it in a better position than the US companies.

So, even if the oil prices turn lower or the demand takes a hit, BP can stay profitable. That's one of the biggest advantages the BP has over other companies.

Also, the valuation of the BP makes it a cheaper option as compared to others. The forward P/E ratio of BP is 10, lower than Occidental's ratio of 14.

On top of that, this FTSE 100 company also pays a dividend with a 6.5% yield. Once again, that's more than what other companies in the oil sector are paying.

However, BP has recently decided to move back into the hydrocarbons and ditch the green energy initiatives. This comes at a bad time due to the UK tax laws.

Recently, the UK government has increased the tax on the Oil & Gas sector. So, it would mean a hit to the BP's profitability, which is not a good thing. This tax stuff is a major disadvantage for BP as compared to the US companies.

To conclude, it is best to wait and see as its not worth buying the BP stock right now.

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