As far as oil companies go, finding those with decent dividend yields can be a difficult task. Most companies operating in the oil & gas space are constrained in terms of the amount of money they are able to return to shareholders by significant capital needs to keep their operations up and running and add on new production capacity over time.
That being said, perhaps one of the best dividend plays of the large caps in the oil & gas sector is BP PLC ADR (NYSE:BP). Still shaking off the after effects of the 2010 Deepwater Horizon spill, this company has hiked its dividend for the first time in years, signaling to the market that increased capital distributions down the road may be feasible.
The dividend increase was nominal (less than 3%), but a signal to the market that things are certainly progressing along nicely for the oil behemoth.
With a forward dividend yield of 5.9%, BP has the potential to provide income investors with a significant boost to one’s income portfolio over time, with a relatively muted risk profile relative to many of its highly leveraged peers.
BP’s integrated operations provide for lower volatility over time and smooths out cash flow concerns, making this company one I would recommend for those looking to add on an income piece to a portfolio or enhance the risk-adjusted long term returns of said portfolio in this current market.
Invest wisely, my friends.
