Oil major British Petroleum (BP) has increased its quarterly dividend payment to shareholders by 10% as it reported a better-than-expected profit for this year’s second quarter.
Going forward, BP as the company is commonly known, will pay a quarterly distribution of eight cents U.S. per share, up from 7.27 cents U.S. previously.
The dividend increase will lift the yield on BP stock above 5%.
The company also said that it plans to maintain its current rate of share buybacks at $1.75 billion U.S. during the current third quarter.
The dividend hike and stock buybacks were announced by BP along with its Q2 financial results.
The company announced a profit of $2.8 billion U.S., which beat Wall Street expectations of $2.6 billion U.S.
The latest profit was ahead of the $2.7 billion U.S. the company earned in the first three months of the year, and better than the $2.6 billion U.S. profit recorded a year earlier.
However, while profits topped forecasts, BP’s revenue was below expectations, with the company announcing sales of $47.30 billion U.S. versus a consensus estimate of $50.94 billion U.S.
BP’s net debt stood at $22.60 billion U.S. at the end of the second quarter, down from $23.70 billion U.S. a year ago.
In recent months, BP has been targeted by activist investor Bluebell Capital Partners, which is calling on the company to increase its oil and gas investments and scale back its clean energy transition.
BP has pledged to lower its greenhouse gas emissions by 35% to 40% by 2030. However, the company has recently softened its climate plans, saying it needs to continue investing in oil and gas to meet global demand.
Also in recent months, BP chief executive officer (CEO) Murray Auchincloss has imposed a hiring freeze and halted renewable energy projects as part of a cost-cutting effort.
The moves come as BP’s stock has declined 6% in the last 12 months to trade at $34.96 U.S. per share.
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