BP plc (ADR) (NYSE:BP) investors haven’t had a great decade. BP stock was walloped following the breathtaking Deepwater Horizon disaster. Even after the immediate crisis passed, the company remained liable for truly massive damages.

Once the company finally appeared to turn the corner from that, oil prices tanked. Long story short, it has been a lost decade for BP stock.

According to the calculator at longrundata.com, an investment in the company 10 years ago has lost 10% of its value. And that includes the BP dividend! However, an opportunity may come from its poor performance. You can make a good case that BP should catch up with better performing sector peers in coming years.

Is now the time to give BP stock another chance?

BP Stock Cons

High Breakeven Price: BP stock tumbled earlier this month following a troubling business update. The company revealed that its breakeven oil price target for 2017 is now up to $60 per barrel. Previously, the company appeared to have a cash flow break-even level around the $50 to $55 per barrel range.

It’s worth remembering that BP ties itself to Brent rather than NYMEX crude prices. Brent is currently trading at $56, a $3 premium per barrel as compared with U.S. NYMEX crude prices. Given that, $60 per barrel — breakeven — isn’t all that far away. One positive note, CFO Brian Gilvary noted that even if oil isn’t at $60 this year, the BP dividend would not be affected.

Rising Debt load: Shortfalls in the company’s cash flow generation have really started to hit the balance sheet. Yes, the price of oil is a problem, and falling refining margins have hit the downstream operations as well.

BP’s debtload has risen to $36 billion. That takes the company’s debt up to 27% of equity from just 21% the prior year. Management has suggested it would prefer that this ratio stay below 30%. To honor that, the company needs higher oil prices soon, or it will be forced to make some choices on the dividend and/or capital expenditures going forward. It seems the dividend is safe for this year, but beyond that, things look less clear.

OPEC Cuts May Not Stick: Much of the recent rally in oil prices has come due to Organization of the Petroleum Exporting Countries actions. OPEC has, it would appear, successfully cut production. Figures out last week showed that the majority of OPEC members are complying with their pledged production cuts. Saudi Arabia in particular has actually cut production even more than they had pledged. Oil jumped following that revelation.

However, the production cuts might not last. Saudi Arabia remains on course to make its IPO for its mega oil company Saudi Aramco next year. Analysts are discussing it potentially going public with a jaw-dropping $2 trillion valuation. Reports now suggests that Saudi Arabia would like to sell $100 billion of the company in the IPO, raising substantial funds for the increasingly strapped government. However, if OPEC is keeping the price of oil up to get the Aramco IPO out the door, look for a correction soon after.

Also, other OPEC members, such as Venezuela, are facing massive social unrest due to low oil revenues. As such, they are unlikely to have the political will to stick with the cuts for long.

BP Stock Pros

More Upside Than Peers: Over the last five years, BP stock has fared much worse than its chief U.S. rivals. Since February 2012, BP stock has fallen 28% (not accounting for dividends). During that same stretch, U.S. sector leader Exxon Mobil Corporation (NYSE:XOM) fell only 2%. Despite the huge decline in crude oil prices over that span, Chevron Corporation (NYSE:CVX) actually rose 5%.

In the past, one could correctly justify BP stock underperformance on the Deepwater Horizon. But that was back in 2010, almost seven years ago now. The ongoing weak action in the company’s stock can’t be blamed on that fiasco any longer.

Now, the more probable explanation is its location. Investors have largely wanted to avoid British equities ever since the Brexit vote last year. Since the beginning of 2016, the iShares MSCI United Kingdom ETF (NYSEARCA:EWU) has been more or less flat, while the S&P 500 has advanced more than 20%. Given that difference in the indexes, it’s not surprising that a major British company, like BP, is underperforming its U.S.-headquartered peers. When British stocks start outperforming American stocks again, BP stock should close the gap with its American rivals.

Huge Yield: BP stock currently yields 7%. That’s a massive yield. Chevron and Exxon both offer less than 4% yields by comparison. Sure, the BP dividend is aggressive, and it’s not entirely clear that they can maintain the dividend at current levels, but the same logic also holds for Chevron. We should assume that if oil doesn’t continue rallying, both companies will struggle to maintain their dividends. So, as it is, BP is currently offering 3% more yield than Chevron.

And it’s worth remembering that British stocks are exempt from dividend withholding taxes. Generally if you own a foreign equity, you have to pay a tax on dividends to that country’s government. However, British stocks don’t come with a tax, meaning that you don’t lose any of the massive yield to foreign tax agencies.

Deepwater Horizon Liabilities Nearing End: BP has already spent more than $60 billion on costs associated with the Deepwater Horizon accident. And it hasn’t put the last of these behind it yet.

In 2016, BP paid out another $7.1 billion in costs associated with the disaster. However, management is estimating Deepwater Horizon costs will be down to $4.5 billion to $5.5 billion this year. 2018 should see costs drop to $2 billion, and they will fall to below $1 billion annually in 2019 and beyond. Given the difficult oil environment, BP’s decreasing disaster liability is well-timed; the company needs all the cash it can get its hands on.

Verdict

I’m not real excited about any of the oil companies. Some, like Chevron in particular, seem like classic value traps. Energy sector investors appear to bidding up the oil majors well ahead of where the actual prices of crude oil and natural gas would suggest was prudent.

That said, BP has badly trailed the rest of the pack, making it the cheapest and highest-yielding option within the sector. If you want to go long a major oil company here, BP is one of the better picks.

At the time of this writing, Ian Bezek had no positions in any of the aforementioned stocks. You can reach him on Twitter at @irbezek.