Is BP A Buy?

BP shareholders have certainly had their fair share of reasons to dump their stock in recent years. The company's tragic spill in the Gulf of Mexico a few years ago was not only a human and wildlife tragedy, but it has cost the company billions upon billions of dollars, including payments to pretty much anyone with their hand out. Despite these developments BP has soldiered on, continuing to earn billions of dollars each year through its robust, diversified business that continues to impress. And after the waterfall decline in oil prices this year, BP shares are at their 52 week lows, offering a potential entry point for longs.

I'd be remiss if I didn't mention the enormous dividend BP pays as it is the main reason to own the stock right now. The company recently raised its payout to 60 cents per quarter, good for a gargantuan 6.3% yield at today's price. This provides investors with REIT-like income from an oil and gas company that is beaten down and out of favor. Not only does the yield entice me right now but the valuation does as well. BP offers a rare combination of a business with a strong moat, a 6.3% yield and a forward earnings multiple of only 10.