Tom Nash
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Inflation Hedge Stock 6/30
🕑 Added 2021-06-14 10:58:20 +0000 UTCHey Patreons, this is episode 6 out of 30 in our inflation friendly stocks.
As I mentioned, there are number of industries that tend to perform better during inflationary times, with energy being one of them. In this post I want to share with you an energy powerhouse stock which will be a great fit based on this strategy and should perform well during inflation.
The stock is $BP British Petroleum.
Currently the price is $27.54 and I can see a price go to $31 per share by the end of this year. The average price target on TipRanks is $29.9 per share. During the past 12 months the share price increased by almost 14% which leaves a lot of room for appreciation and makes it into a very interesting inflation play.
BP is a $92B energy company, with with a very nice 4.6% expected dividend yield. The company is generating $180B in revenue per year.
The Levered Free Cash Flow Margin for the past 12 months is 10.55%. Their revenue took a hit last year with -24.15%, but that seems to be covid driven, and should reverse once the markets fully reopen and energy consumption goes up. This metric scares most investors, but if you can see its transitory you see this as an opportunity.
BP is trading at a very low multiple, given its attractive status as an inflation friendly company, the EV / Sales is 0.83! EV to Ebitda is 7.66! Price to Sales is 0.5! This company is trading at a massive discount right now.
The stock is up 25% over the past 6 months, which is a lot but its still very cheap and its still extremely attractive as an inflationary hedge. Don't forget the 4.6% dividend yield which is also in play here. Going back to pre-COVID levels and considering inflation, this stock should serve as a very good safe haven to ride out the storm.
DISCLAIMER: All of Tom's trades, strategies, and news coverage are based on his own opinions alone and are only done for entertainment purposes. If you are watching To'ms videos, please Don't take any of this content as guidance for buying or selling any type of investment or security. Tom Nash is not a financial advisor and anything said on this YouTube channel should not be seen as financial advice. Tom is merely sharing his own personal opinion. Your own results in the stock market or with any type of investment may not be typical and may vary from person to person. Please keep in mind that there are a lot of risks associated with investing in the stock market so do your own research and due diligence before making any investment decisions.
Comments
Jason
isnt 0.83 above average by industry standards
Jason
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
Stephen P
I have xom 👍
Steve
Don’t forgrt XOM!
Tung Pham
Good morning all!
