BP vs Realty Income: Yield vs Reliability in Dividend Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Dividend Yield Comparison: BP's dividend yield stands at 5.6%, surpassing Realty Income's 5.3%; however, BP's history of cutting dividends in 2020 raises concerns about its reliability, while Realty Income has increased dividends for 30 consecutive years, demonstrating a stronger commitment to shareholder returns.
- Strategic Transformation Impact: BP's initial commitment to renewable energy has faltered, while Realty Income has successfully exited the office property sector and expanded into Europe without cutting dividends, indicating greater stability in its strategic execution.
- Business Model Differences: Realty Income operates as a large real estate investment trust (REIT) with over 15,500 properties under a net lease model, which mitigates single-asset risk, whereas BP faces revenue instability due to oil price volatility, leading to greater dividend fluctuations.
- Peer Comparison: Although BP offers a higher dividend yield among its peers, its debt-to-equity ratio is twice that of competitors, and its poor dividend history contrasts with TotalEnergies, which has maintained dividend stability during its transition to renewable energy, making it a more attractive investment option.
Analyst Views on BP
Wall Street analysts forecast BP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BP is 84.26 USD with a low forecast of 6.38 USD and a high forecast of 503.69 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
5 Buy
5 Hold
1 Sell
Moderate Buy
Current: 35.380
Low
6.38
Averages
84.26
High
503.69
Current: 35.380
Low
6.38
Averages
84.26
High
503.69
About BP
BP p.l.c. is a United Kingdom-based integrated energy company. Its segments include Gas & low carbon energy, Oil production & operations, Customers & products, and Other businesses & corporate. The gas & low carbon energy comprises regions with upstream businesses that predominantly produce natural gas, gas marketing and trading activities and its solar, wind and hydrogen businesses. The oil production & operations segment comprises regions with upstream activities that predominantly produce crude oil, including bpx energy. The customers & products segment comprises its customer-focused businesses, which include convenience and retail fuels, electric vehicle (EV) charging, as well as Castrol, aviation and business-to-business (B2B) and midstream. It also includes its products businesses, refining and oil trading, as well as its bioenergy businesses. The other businesses and corporate also comprises the Company's shipping and treasury functions, and corporate activities worldwide.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
