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[video] Dicker: BP Stock Pops -- Will Other Majors Follow?
NEW YORK (TheStreet) -- I was talking to Jim Cramer today about BP (BP) - Get BP p.l.c. Report and the other major oil companies including Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report, ConocoPhillips (COP) - Get ConocoPhillips Report and Chevron (CVX) - Get Chevron Corporation Report.
BP reported its quarterly earnings on Tuesday and the other majors are scheduled to report tomorrow and Friday.
I thought BP provided a terrific insight into how to play the earnings of the other majors while also pointing out the vast value that remains in BP. I had recommended holding BP before any other major because I felt that their assets were being undervalued because of the continuing law suits surrounding the Deepwater Horizon oil spill in 2010.
But other aspects of the BP report will, I think, mirror much of the financial reports coming from the other three American oil majors. There has been a consolidation trend of asset sales and a dropping profile of oil production, both seen in the BP report. Included with those asset sales and consolidation has come increasing returns to shareholders in the form of share buybacks and dividend increases, again seen in the BP report.
I suggested to Jim that owning the majors is very much a proxy of a bond trade, with steady, if not rising dividends, countered by static or even dropping growth. He made a parallel to stocks like
Pfizer
(PFE) - Get Pfizer Inc. Report
and
Kellogg
(K) - Get Kellogg Company Report
, which I thought appropriate.
I talk more about the majors and their prospective quarterly reports with Jim in the video above.
At the time of publication the author is long BP.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.
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Dan is currently President of
a wealth management firm and is the author of
published in March of 2011 by John Wiley and Sons.
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Dan Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on
CNBC
,
Bloomberg
US and UK and
CNNfn.
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Dan obtained a bachelor of arts degree from the State University of New York at Stony Brook in 1982.
