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Here's Why BP (BP) is a Strong Value Stock

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

While you may have an investing style you rely on, finding great stocks is made easier with the Zacks Style Scores. These are complementary indicators that rate stocks based on value, growth, and/or momentum characteristics.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.


BP has come a long way since the Gulf of Mexico oil spill incident on Apr 20, 2010, which followed the explosion on the British energy giant’s Deepwater Horizon rig. The largest oil spill incident in America’s history had disrupted the integrated energy player’s financial performance. Notably, BP had taken a pre-tax charge of $32.2 billion related to the disaster, which resulted in the company’s record loss of more than $17 billion in the June quarter of 2010. BP also suspended dividend payments for three quarters, until the firm started paying dividends again in early 2011.

BP is a Zacks Rank #3 (Hold) stock, with a Value Style Score of A and VGM Score of A. Shares are currently trading at a forward P/E of 3.7X for the current fiscal year compared to the Oil and Gas - Integrated - International industry's P/E of 4X. Additionally, BP has a PEG Ratio of 0.6 and a Price/Cash Flow ratio of 3.7X. Value investors should also note BP's Price/Sales ratio of 0.5X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Five analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.57 to $8.39 per share. BP has an average earnings surprise of 15.6%.

Investors should take the time to consider BP for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.

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