BP Delivers First Dividend Since Gulf Oil Disaster

London-based BP (BP) announced today that it will resume paying a quarterly dividend as the oil giant reported a 30% pop in quarterly profit. The stock edged higher in midday trading. BP, which suspended payouts in June 2010 following the oil spill in the Gulf of Mexico, announced a quarterly dividend of $0.42 per American depositary share, or $0.07 per ordinary share, to be paid March 28.

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"We believe now is the right time to resume payment of a dividend to our shareholders,” said BP chairman Carl-Henric Svanberg in a statement. “We have chosen a prudent level that reflects the company's strong underlying financial and operating performance but also recognizes the need to fully meet our obligations in the Gulf of Mexico and to maintain financial flexibility." Christine Tiscareno, an analyst at S&P Equity Research who covers BP, thinks there will be opportunity for the global oil and gas company to grow that dividend and ultimately match its peers. If the company does maintain that $0.07 payout, she says, it would represent a 3.8% dividend yield.

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Tiscareno currently rates BP a Hold given the uncertainties still facing the company. “For the next six months, we have to wait and see,” she says. “We still have to see how heavy handed the US government decides to be with BP.” The company reported fourth-quarter profit of $5.6 billion versus $4.3 billion in the year-ago period. For the year, BP suffered a loss of $3.7 billion compared with a profit of $16.6 billion in 2009. The fourth-quarter results, BP said, included a $1 billion charge for oil-spill related costs. That brought the total oil spill charge for the year to $40.9 billion.

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BP reported replacement cost profit -- an industry measure that strips out changes in the oil price -- of $4.6 billion in the fourth-quarter, or $1.47 per share, which undershot analyst expectations by $0.13, according to Thomson Reuters. For 2010, the company reported a replacement cost loss of $4.9 billion compared with a profit of $14 billion the year earlier. Read the earnings report here. Shares edged higher in midday trading, up 0.5% to $47.70. The stock is up 78% from its July low. The company's competitors include Big Oil rivals like Exxon (XOM) and Chevron (CVX). To pay for the consequences of the oil-spill, which ranked the worst in US history, BP plans on selling $30 billion of assets. The company is well ahead of that goal, analysts say, with agreements for $22 billion in sales already signed by year-end 2010. The company also plans on selling two US refineries: Texas City and Carson, which will fetch an estimated $3.7 billion.

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