BP Still On A Roll After Earnings

| About: BP p.l.c. (BP)
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Although markets are closed today, earnings are still coming out. One of the core pieces of my income portfolio, BP plc. (NYSE:BP) reported earnings today. It pretty much beat across the board and showed again why it is on the comeback trail after a horrid two years.

Key highlights from BP's earnings report:

  • Net profits after adjustments came in at $5.17B, more than a billion over consensus estimates of $4.09B.
  • Refining and marketing drove this beat as profit there came in at $3B, 60% higher than most estimates calling for just $1.8B. The company also does not have any refineries that are in Sandy's path of destruction.
  • More importantly, the company announced they are raising their dividend payout by 12.5%.

4 additional reasons why BP is a solid income selection at under $42 a share:

  1. With the just announced dividend hike, the stock yields over 5%. With the cash extracted from its recent deal with Rosneft, I would look for dividend payouts to continue to increase over the next few years to reward what the company's CEO stated in earnings report "its long suffering shareholders" with sticking with the company.
  2. The company should make its final payment to the $20B gulf oil spill compensation fund by the end of the year. It hopes to settle the rest of its suits in the near future, a prospect that will improve with a Romney victory. It also has raised $35B of its $38B goal via asset divestitures.
  3. BP has an A rated balance sheet and the median price target of $50 on the shares. S&P is more upbeat and has a $56 price target on the stock.
  4. Bottom line: Investors are getting a 5% plus yielder that is getting back on its feet for just over 7.5x forward earnings. A bargain in anyone's book.

Disclosure: I am long BP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.