The BP (LSE: BP.) share price has positive been erratic previously few years. However for me, it’s the dividend that issues.

In spite of everything, it’s onerous to think about many money cows with higher monitor data of filling their shareholders’ pockets annually.

The present weak share price means we may very well be a ahead dividend yield as excessive as 5.8% this yr. And if BP can maintain that going within the years forward, it might compound up to a reasonably penny.

Forecasts

What does the long run for BP dividends appear like?

Checking a variety of sources, I see some variation. And it’s compounded by the truth that BP pays dividends in US cents moderately than pennies, so there’s a forex trade issue there.

If the pound ought to strengthen within the coming decade, these cents will purchase fewer pennies. It really works the opposite method spherical too, and a weaker pound would imply larger sterling dividends. But it surely’s an additional layer of threat.

The consensus proper now could be round 23-24p per share for this yr. And which means a yield of 5.7% to five.9%. By 2026, the analysts have the dividend edging up to 27p per share, pushing the yield to six.7%.

Share price

What about share price forecasts? There’s a median goal of 514p proper now, although the vary stretches from 430p to 654p. With the price at 408p as I write, that appears like a reasonably robust purchase consensus.

I at all times deal with dealer price targets with warning, although. They so usually appear like little greater than fingers within the air and guesswork.

However I believe they are often value contemplating, if solely to get a really feel for the market sentiment behind a inventory.

Firm outlook

BP’s first half this yr was highlighted by “robust working money circulation and decrease internet debt“. Money circulation reached $8.1bn, whereas debt was lowered to $22.6bn.

On the shareholder reward entrance, energy continues. In addition to lifting the dividend by 11%, BP spoke of a $3.5bn share buyback within the second half. That follows from $3.5bn within the first half.

Wanting ahead, the agency set one among its priorities as re-focusing its bioenergy enterprise. And that certainly indicators the principle uncertainy for the long-term future.

The BP dividend outlook appears robust for now. However a transition to extra to renewable vitality sources piles uncertainty onto that.

Transition

With BP, I believe I’m seeing an uncommon mixture. I’ll usually charge a inventory as wanting good for a long-term purchase, however with short-term threat. And that’s high quality, as I’m in it for the long run.

However right here, I worry I see the alternative. I believe the prospects for the subsequent few years look actually good. However the additional ahead I look, the much less assured I’m.

For that purpose, despite the fact that I believe I may be passing up a discount purchase, I’ll give BP shares a miss. Oh, and since I don’t need anti-oil protestors to cowl me in soup.