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BP could be next big energy name to cut dividend, options trader says

Jul. 22, 2015 10:49 AM ETBP p.l.c. (BP) StockBPBy: Carl Surran, SA News Editor29 Comments
  • After Chesapeake Energy scrapped its dividend, the big question now is which energy company could be next to cut.
  • According to trader Andrew Keene, options prices imply that among companies whose dividends are higher than their EPS, BP (BP -1.5%) could cut its dividend 10%-20% by 2016.
  • By some measures, BP's 6.2% dividend yield does not look comfortable, as analysts expect the company to earn $2.41/share in 2015, only a penny more than its annualized dividend yield.
  • Oppenheimer analysts believe BP's dividend is safe but still recommend staying away from the stock, which they say is near a 20-year breakdown in the chart trend, as well as the entire energy sector.

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