BP PLC
🇬🇧 BP.LSE · London · GB0007980591
Energy
GBX 591.20 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
1689.1
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 591.20 ÷ 0.35 = 1689.1
TTM period through: 2025-12-31
Forward P/E (estimated): 9.1
Based on analyst estimates
Reference: Provider P/E (Forward): 9.1
Yield (Fwd)
4.23%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.73%
Net Debt/EBITDA (TTM)
1.2x
Latest quarter: 8.3x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 8.3x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
7142.9%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 9198.2%
Cash Flow Payout (TTM): 20.6%
FCF Coverage (TTM): 2.23x
ROE
1.7%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
5.3x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
While BP generates massive free cash flow and trades at an attractive forward valuation, its structural energy transition and recurring dividend resets make it an unsuitable fit for conservative income strategies. The announced 21.4% upcoming dividend cut and ongoing multi-billion dollar non-cash impairments highlight the severe execution risk of its strategic pivot. Not recommended for new positions, as the structural transition risks and unreliability of the payout outweigh the tempting yield.
Sector Context
BP is one of the world's largest integrated energy companies, involved in oil and gas exploration, production, refining, and marketing. For dividend investors, the energy sector is historically cyclical but currently faces a major structural shift; while legacy operations generate massive near-term cash flows, the mandated transition to low-carbon energy introduces significant execution risk and unproven returns on capital.
Temporary Opportunity Identified
Massive statutory net losses driven by billions in non-cash asset impairments related to its low-carbon transition businesses, which temporarily distorts the TTM P/E ratio to over 1600x despite robust underlying cash flows.
📊 Strategy Analysis
- • Outstanding free cash flow generation provides a dividend coverage ratio of 2.23x, demonstrating strong underlying cash conversion despite statutory accounting losses.
- • The forward P/E of 9.1x presents an attractive valuation multiple, indicating that the market has heavily discounted the ongoing strategic transition.
- • Conservative leverage management is evident with a Net Debt/EBITDA ratio of 1.16x, providing a robust balance sheet to navigate cyclical commodity swings.
⚠ What to Watch
- • The announced 21.4% dividend cut for 2026, compounding previous cuts in 2020 and 2021, proves that the payout is routinely sacrificed during strategic resets and cyclical downturns.
- • The fundamental structural transition away from legacy fossil fuels toward lower-carbon technologies introduces massive, long-term execution risk that is unsuitable for conservative dividend investors.
- • Statutory earnings remain heavily distorted by recurring multi-billion dollar non-cash impairments related to transition businesses and legacy operations.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.