Time to buy BP?

Since the 2010 oil spill BP’s stock has been staggering around $37-$45 despite posting outstanding third quarter profits and raising dividend by 14% to 5% a year. Most recently after their ex-dividend date BP’s stock dropped from $43 to under $40, or by more than 2.3%. The last time BP’s stock dropped below $40 was in August 2012, and shortly after it bumped up to $42.5 a share as its ex-date was approaching. BP, like most oil companies, can count on revenue well over $300 billion per year with increasing demand for oil through-out the world.

Although BP seems to be an ideal candidate for a long-term dividend investment with growth prospects, how much can the company’s stock actually grow? Like many other extremely profitable companies that are seen by investors as being toxic for the environment or for people (like RJR in the 1970s), BP’s stock may never reach price levels of $60-$70 like before the oil spill.

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