BP shares are up 7% for the week but still yield 5.4% on a P/E of only 6! Time to buy?

I bought it BP (LSE: BP) shares last month because I thought they looked overvalued. I'm already thinking about buying more. Should I jump?

I FTSE 100 The oil and gas giant appeared too cheap to ignore trading at six times earnings. Energy stocks tend to be cyclical, and this looks like a good time to hold BP when it's low rather than high.

As the energy shock subsided, much of the heat had gone out of BP's share price. I didn't want to miss the next climb, so I entered.

Is this a buy for the FTSE 100?

I was also tempted by the dividend. In 2020, the board revised its shareholder payout to 26 US cents per share, down from 41 cents a year earlier. This reduces the yield to just over 4%. I was used to seeing BP shares fall north of 6%, and I felt this was a bit of a letdown.

However, with shares down 16.54% over the past year, BP now has a trailing yield of 5.39%. That is comfortably above the FTSE 100 average of 3.54. Even better, the yield is expected to reach 5.7% this year and top 6% by 2025.

Buying a timeshare the right way is usually a lot of luck, but I seem to have gotten this right. When I bought BP, the price of oil was dropping below $70 a barrel. The tragic and horrific events in the Middle East drove it to $78 at the time of writing.

The price of oil rose more than 8% last week, its biggest weekly jump since January 2023. Hopes that the US will recover have also played a role, as this will increase demand, as there may be Chinese stimulus.

I look forward to buying more of this stock

BP's share price rose 7.39% in the week. Now there is talk of oil heading towards $100 a barrel. That will drive BP's share price much, much higher. However, I don't put much faith in such predictions. There are too many variables at play.

Neither Washington nor Beijing wants to see oil prices rise right now. Markets are betting they will put pressure on Israel and Iran to shut things down. That may explain why the price of oil hasn't risen much.

I cannot predict where the price of oil will go. And I wouldn't trust anyone who says they do. Oil could easily hit $50 a barrel, if rumors that Saudi Arabia might flood the market to take a fair share are correct. That would reduce the value of my BP shares. Again, it's just a guess.

What I do know is that BP shares still look good value, despite last week's hop, trading at 6.11 times trailing earnings.

The same long-term challenges remain, as the planet warms but BP struggles to find a future beyond fossil fuels. But I bought the stock with a long-term view and taken from that view, I still think they look like a strong buy today, I will buy more BP shares when I have the money to do so.