BP P.L.C. (BP) conducts major operations in the upstream (exploration and production) sector and the downstream sector (refined petroleum products). Its other business units include alternative energy exploration and partnerships/acquisitions that give it a foot in the door throughout the world.

Here we go over what makes BP strong, what makes BP special, and a few of the many metrics that may be of interest to current and prospective shareholders. One thing that immediately stands out about BP is its high yield. The company currently has a dividend yield of over 6%. You can download a free spreadsheet of over 400 stocks with 5%+ yields here.

Factors to consider: the company’s competitive advantage(s), growth prospects, and valuation estimate. We will also go over BP’s performance and fundamentals in the previous recession for a benchmark estimate of what to expect should another recession hit in the near future.

Current Events

The main event to consider is the 2017 Q4 earnings release. Anyone who had faith in BP’s resilience had reason to pop open the champagne on February 6.

Strong 2017 Q4 EPS and earnings data ($0.64/share and $67.8B, respectively) buttressed the fundamental case for BP.

Of course, investors praise good news, but the question is whether this kind of good news will continue. An answer can only be given if wrapped in estimates, assumptions, trend extrapolation, and other implicit admissions of uncertainty. With that said, this article hopes to clear up some of that uncertainty.

Competitive Advantage

BP’s size is its primary and overriding strength. To go into depth with comparisons against other major players would expend much of your time to come to this conclusion: only another major oil company, perhaps a state-sponsored one like Aramco, could derail the juggernaut that is BP. There’s a reason everyone was shocked when Goliath was knocked down – that kind of thing doesn’t usually happen, and BP is a Goliath in upstream and downstream operations, both domestically and outside the U.S.

The company commands more than 17.8 BBOE in proven reserves and retains major operations in upstream and downstream activities. It has ventures in Russia, China, the Middle East, and throughout the world. It has reported more revenues from outside the U.S. than from within it.

BP has also ventured into alternative energy and devotes significant resources and attention to its “BP Ventures” unit. BP Ventures is focused on buying other businesses and technologies that may catapult overall BP growth and shareholder returns beyond what one might expect with traditional profits from E&P as well as downstream sales activities.