LONDON -- A popular way to dig out reasonably priced stocks with robust growth potential is through the "Growth at a Reasonable Price", or GARP, strategy. This theory uses the price-to-earnings to growth (PEG) ratio to show how a share's price weighs up in relation to its near-term growth prospects -- a reading below one is generally considered decent value for money.

Today I am looking at BP (LSE:BP) (NYSE:BP) to see how it measures up.

What are BP's earnings expected to do?

EPS Growth 36% 12%
P/E Ratio 8.4 7.5
PEG Ratio 0.2 0.6

Source: Digital Look

BP is expected to recover strongly from last year's 55% earnings per share (EPS) dip in the medium term, according to broker estimates, with chunky earnings expansion predicted for both this year and next.

This projected rebound leaves the company's PEG rating for 2013 and 2014 firmly trenched in bargain basement territory. And its price-to-earnings (P/E) ratio for these years also illustrates fantastic value for money -- a readout below 10 is generally considered a canny price pick.

Does BP provide decent value against its rivals?

 FTSE 100Oil & Gas Producers
Prospective P/E Ratio 15 22.6
Prospective PEG Ratio 4.4 1.2

Source: Digital Look

BP easily outperforms both the FTSE 100 and its oil and gas peers in terms of both forward PEG and P/E ratios, both of which fail the "value" test on these measures.

I strongly believe that substantial increases in groupwide output in coming years is set to drive BP's earnings skywards.

Energy output set to surge
BP's shell price has declined from multi-month highs recently, as fears over the condition of the global economy, and subsequent concerns over what this means for energy prices, has dented investor appetite for the stock.

As well, the lengthy court battle over the 2010 Gulf of Mexico oil spill continues to drag on, extending uncertainty over what the final payout could be -- the firm has attached a total cumulative charge of $42.2 billion, although the final bill could still exceed this. As well, news that European regulators raided BP's London premises last month over possible oil price manipulation prompted more bad press for the oil giant.

Still, I believe that these concerns are overshadowing the company's strong growth profile which rising production should create. After bringing online five mammoth projects in 2012, the company is preparing to get a further four up and running this year and another six next year.

Disposals accounting for 120 thousand barrels per day are set to offset modest underlying growth this year. But falling divestments from next year, allied with rising capex -- expenditure of between $24 billion-$25 billion currently is expected to rise to $24 billion-$27 billion from 2014 -- should help to push output higher.

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