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2. BP p.l.c. (NYSE:BP)

Number of Hedge Funds holders: 38

BP p.l.c. (NYSE:BP) is engaged in carbon-related products and services. Founded in 1889, the company has established a strong presence in gas and low-carbon energy, as well as in the trading of renewable and nonrenewable power and production of bioenergy.

BP p.l.c. (NYSE:BP) reported a profit of $2.8 billion in the second quarter of 2024, up from $2.7 billion in the first quarter. This profit came from a quarterly income of $48.3 billion. The gas and low-carbon energy sector reported a reporting a profit of $1.4 billion, down from $1.7 billion in the first quarter. Reduced foreign exchange losses and exploration write-offs partially offset weaker gas trading results during the quarter.

The oil production and operations segment recorded a profit of $3.1 billion, while the customers and products segment posted a profit of $1.1 billion. The customers segment, in particular, saw a $0.4 billion increase in the second quarter, driven by strong performance in Castrol, improved fuel margins, and seasonal demand.

Due to its strong financial performance, the company generated an operating cash flow of $8.1 billion in the second quarter, which helped BP p.l.c reduce its debt to $22.6 billion. This robust cash flow also enabled the company to pay a dividend of $0.8 for the quarter. According to The Guardian, the company plans to return $7 billion to investors through dividends and share buy-backs, following better-than-expected quarterly profits.

In a significant strategic move, BP p.l.c announced its financial investment in the Kaskida project in the U.S. Gulf of Mexico, underscoring its commitment to affordable and reliable energy. The project expected to produce 80,000 barrels of crude oil per day. Additionally, the field has identified renewable resources estimated at 275 million barrels of oil.

In addition to its traditional crude oil operations, the company announced an expansion in Brazil to diversify its biofuel operations by producing second-generation ethanol and environmentally friendly aviation fuel. According to the Environmental and Energy Study Institute, pollution from airplanes and jets account for 10% of the total transportation-related pollution in the U.S. This presents a significant market opportunity for BP in the development of sustainable fuels.

Given BP’s strong presence across multiple sectors, five analysts predict a 22.50% upside potential in the share price. However, investors should monitor the recovery of demand for oil products following maintenance activities. Also, 38 hedge funds are bullish on the stock.