BP is a dividend-growing stock that is moving towards renewable energy while continuing to produce oil and gas. The Deepwater Horizon oil spill and the pandemic have affected the company's fundamentals, but they are stabilising and exhibiting growth potential. Due to its low valuation and strong dividend and buyback programme, BP makes an appealing investment.
Although the corporation recognises that renewable energy sources hold great promise for the future of energy, it also takes advantage of business opportunities in the oil and gas industry. The corporation invests substantially in LNG (liquified natural gas), one of the most significant potential, and it will gain more notoriety as Europe stops importing natural gas from Russian pipelines. As Europe switches to renewable energy, BP can support the continent's gas demand.
Across the board, BP is significantly investing in renewable energy. For customers waiting for their autos, it makes investments in EV (electric vehicle) charging stations and convenience stores. The fuels of the future, hydrogen and biofuels, are also investments. While hydrogen is clean, primarily green hydrogen, biofuels are carbon neutral. Having access to new green fuels and charging infrastructure will put BP in a good position going forward. Electricity will be used for transportation, and hydrogen and biofuels will be used in industries.
A recession is a significant risk for energy industries. During recessions, expenditure declines, which lowers demand for fuel and energy. Now that the economy must deal with rising rates, which decrease investments and spending, there is a possibility of a slump. The EPS of BP will be adversely impacted in the near and medium term if the world experiences a recession.
The oil and gas sector, which makes up the majority of BP, will remain unchanged over the next few decades. The business also hopes to expand by making investments in brand-new areas related to renewable energy and green electricity. The corporation doesn't have the same advantage it does in oil and gas because it lacks knowledge in these areas.
Leave a Reply