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BP (LSE:BP) shares have been steaming greater lately because of surging oil and gasoline costs. A lot so, solely 5 FTSE 100 shares have executed higher over this era (Computacenter, Glencore, Ithaca Vitality, Lion Finance, and Customary Chartered).
BP is up 49%. So had somebody invested 5 grand one yr in the past they’d now have just below £7,500. Dividends have additionally been gushing, including one other £300 or so to their return. Good.
The query now could be, are BP shares nonetheless value contemplating?
What’s the yield?
One of many first issues any investor will have a look at is the potential dividend yield. Presently, Metropolis analysts anticipate BP to dish out 33.7 cents per share for 2026, then 35.1 cents in 2027. This interprets right into a ahead dividend yield of 4.25%.
For context, Shell gives a ahead yield of three.1%, whereas the FTSE 100 can be in that ballpark. So the near-term earnings prospects look fairly respectable, particularly with elevated oil costs.
Certainly, the present forecasts may show conservative.
What occurred in H1?
The oil large’s outcomes again in August seemed robust. Underlying substitute value revenue (which removes unstable stock swings and one-off fees) was $5.7bn for the second quarter and $8.9bn for the primary yr. That was up from $2.4bn and $3.7bn respectively for a similar intervals in 2025. The quarterly dividend elevated 4% to eight.66 cents.
Nonetheless, CEO Meg O’Neill admitted that sure areas that fell wanting expectations. She mentioned: “Operationally, our crops didn’t run in addition to they did final quarter — upstream plant reliability was 92.4%, in comparison with 95.7%, and manufacturing was down and our refineries processed much less crude“.
On a optimistic be aware, internet debt dropped by 15% to $22.3bn. And this might fall additional in future as BP has signalled its intention to promote property. These embody its retail enterprise in Austria, UK North Sea property, and US biogas enterprise Archaea.
Is BP nonetheless value a glance?
The share worth reached a symbolic degree final week — its highest for the reason that disastrous Deepwater Horizon spill in 2010.
To my data, Deepwater stays the most important unintended marine oil spill in historical past. And this certainly performed a component within the firm’s pivot to succeed in internet zero by 2050 (since ditched, after all, to concentrate on conventional oil and gasoline).
I’ve been impressed with O’Neill’s frank evaluation of BP’s previous operational failings. Certainly, it jogged my memory of Tufan Erginbilgic’s ‘burning platform’ feedback when he took the helm at Rolls-Royce.
In August, she wrote: “Our efficiency over the previous few years has not met our personal expectations, not to mention these of our shareholders. Now we have not delivered persistently; we have now written off an excessive amount of worth; and our prices and liabilities should not resilient sufficient in a low worth atmosphere…We have to take a transparent have a look at ourselves.”
Talking of a low-price atmosphere, might we see one within the months forward? It may not appear probably in the mean time, with issues escalating throughout the Center East. However had been the Iran state of affairs to vary, the worth of oil and gasoline would probably fall sharply.
The BP share worth would then comply with swimsuit, which makes the inventory considerably dangerous in my eyes. Due to this fact, I see safer earnings alternatives to think about elsewhere throughout the FTSE 100.
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Ben McPoland owns shares of Rolls-Royce.
