BP gushes on earnings but shares and dividend still look good

No doubt the global recession has been tough on energy companies, but now that oil is back at $80 a barrel, well, it's hard to have much sympathy. Still, if you can't beat 'em, join 'em. BP (BP), as one of the world's largest integrated oil and gas companies, has a bright future, thanks to inexorably rising demand.

The energy giant reported a quarterly profit Tuesday that easily surpassed analysts' expectations. That sent shares up sharply, but they still offer a compelling value. On a forward earnings basis, the stock trades at about a 50 percent discount to the broader market, according to Thomson Reuters, while historically being about 25 percent less volatile. That makes for an intriguing risk-reward scenario.