Replies to post #4703 on BP Plc (BP)

[WildCatStocks]

Here is some more positive research.

1. Earnings power
Buffett is famous for betting on a sure thing. For that reason, he likes to see companies with demonstrated earnings stability.

2. Return on equity and debt
Return on equity is a great metric for measuring both management’s effectiveness and the strength of a company’s competitive advantage or disadvantage — a classic Buffett consideration. When considering return on equity, it’s important to make sure a company doesn’t have an enormous debt burden, because that will skew your calculations and make the company look much more efficient than it is.

BP generates a fairly large return on equity — 25% over the past year, 17% on average over the past five years — while employing a limited debt-to-equity ratio of 39%.

3. Management
CEO Robert Dudley has been at the job since October 2010. He’s held various other roles over the past few decades at BP and Amoco before BP acquired it.

4. Business
Although there have been major technological advancements in exploration and production over recent years, the industry isn’t particularly susceptible to technological disruption.