I need to diversify my revenue streams. However I’m additionally a bit lazy, so I don’t need to do a lot work to realize this. That is the place dividend shares are available. I can entrust administration to handle the general public firm and generate a wholesome revenue. They will then distribute this to me within the type of dividends. Apart from researching the corporate and protecting up so far with its actions, there’s little or no for me to do. This makes it the last word type of passive revenue.

BP (LSE:BP) shares seem like a fantastic choice for this. The corporate introduced its second-quarter outcomes for 2024 on Tuesday (30 July). It raised its dividend from 7.27 cents per share to eight cents. It is a 10% rise, but its share price has fallen by 1.2% because the information. Does this current a shopping for alternative?

The dividend alternative

If I take advantage of the Financial institution of England alternate price of 1.2793 on the time of writing on 2 August, that 8 cents dividend per share is equal to six.25p.

If we assume that’s the new quarterly price going ahead, then the annualised dividend is 25.01p.

On the time of writing, the share price is 449.40p. Due to this fact, to make an additional £200 a month (taking into account that dividends aren’t assured) I’d need to spend £43,119.93 to buy 9,595 of its shares.

Now, I admire that’s no measly sum. Nevertheless, Metropolis analysts are predicting additional dividend will increase via 2025. There’s robust justification behind this as effectively as a result of ever since September 2020, the corporate has raised its quarterly dividend at the least as soon as yearly.

Meaning I’m prone to see this additional revenue rise over time too. If I had been to reinvest my dividends again into BP shares, I might additionally speed up the speed of progress of my second revenue.

A robust quarter     

Apart from its dividend, BP loved a great quarter.

The corporate makes use of alternative value revenue as a measure of its internet revenue. This displays the alternative value of its provides (by excluding stock holdings features and losses and their related tax impact). This was $2.8bn when analysts had been solely anticipating $2.6bn.

Moreover, its internet debt fell from $24bn within the first quarter to $22.6bn.

Money circulation has additionally been trending upwards, rising from $5bn within the first quarter to $8.1bn this quarter. That is additionally a fantastic enchancment over the $6.3bn generated within the second quarter final 12 months.

Now what?

My one concern with BP is that the world will ultimately pattern away from fossil fuels. This can be a significant problem for the corporate, particularly as its efficiency tends to function equally to the efficiency of oil costs.

Nevertheless, oil demand remains to be anticipated to rise till at the least 2030. Goldman Sachs researchers suppose it might even improve via to 2034, which is nice for BP. Furthermore, the corporate is planning for a world after fossil fuels by pumping giant sums into renewable power.

It additionally has a really low-cost ahead price-to-earnings (PE) ratio of seven.9. Due to this fact, if I had the spare money, I’d purchase a few of its shares right now.