Integrated energy stocks’ dividend
ExxonMobil (XOM), Chevron (CVX), Royal Dutch Shell (RDS.A), and BP (BP) have paid dividends regularly in the past few years. In 4Q17, XOM paid a dividend of $0.77 per share, 2.7% higher than its dividend in 4Q16. CVX’s dividend was stable at $1.08 per share in 4Q16 and 4Q17. XOM’s and CVX’s dividends were announced on October 25, 2017, and paid on December 11, 2017.
Shell’s and BP’s dividend payments were also steady. In 4Q17, Shell’s dividend payment stood at $0.94 per share, and BP’s dividend payment stood at $0.60 per share. Wall Street analysts foresee integrated energy stocks’ dividend payments staying flat between 4Q17 and 1Q18.
Business environment in 4Q17
In 4Q17, integrated energy companies enjoyed a better energy environment. Oil prices, which affect upstream segments, rose YoY (year-over-year), and refining margins, which affect downstream segments, expanded. On average, WTI (West Texas Intermediate) rose 12% YoY to $55.20 per barrel in 4Q17, and the US Gulf Coast WTI 3-2-1, a benchmark crack, expanded 39% YoY to $17.90 per barrel.
Whereas BP and Shell have higher dividend yields than XOM and CVX, BP’s dividend yield has fallen from 7.4% in 4Q15 to 5.8%. Its drop in yield is likely due to its stock price rising. Meanwhile, Chevron’s dividend yield has fallen from 4.7% in 4Q15 to 3.4%, Royal Dutch Shell’s has fallen from 6.9% to 5.7%, and ExxonMobil’s has risen from 3.5% to 3.7%. The SPDR S&P 500 ETF’s (SPY) dividend yield has fallen from 2.0% in 4Q15 to 1.8%.