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Is the BP dividend safe? What do I look for to make sure? The cash flow statement?


As long as the price of oil stays above 40 a barrel? Do I look in the statement of cash flows? I want to buy some stock while the price is low, hopefully it will get close to 36 a share before rebounding.

538 day(s) ago

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mikebadj 		Rule of thumb is high yield with low pe interprets poor earning and growth in the future as the company has less retained earning for the future. Normally a company will pay out high yields to keep or attract share holders by using the yields to distract them from poor earnings prospects

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NessaCPA 		Yes - for dividend paying stocks, you'll want to get a good understanding of their cashflow statement.
Oil is a pretty safe bet at this point... We simply do not have a good enough replacement for oil. The price will creep back up when demand increases. The next big source of supply is Canadian Oil sands which only becomes profitable at about $80/barrel.
As far as timing your purchase... I would not spend too much time trying to figure the absolute bottom (you're more likely to miss it).

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vinwubulldogs 		It's not just the price of oil, but how well the company is manged.

For dividend stability, I look at the income statements. If there's a significant drop in income from the previous period, the dividend may be at risk. A company may consider cutting their dividend to preserve capital. It's best to diversify to receive dividends from more than one stock and market sector.

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MDcpa05 		Its been said that "more money has been lost chasing yield than at the point of a gun". If you want to invest in an oil company I would go with Exxon. They have better cash flow. But I believe oil is going lower. Maybe much lower. We have huge supplies of crude and growing every week. Even when demand returns its going to take time for current and continuing supplies to be absorbed.

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Question Title Is the BP dividend safe? What do I look for to make sure? The cash flow statement?
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