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Has Shell’s Dividend Yield Risen?

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Shell’s dividend per share

We began this series by reviewing Royal Dutch Shell’s (RDS.A) stock price performance followed by its moving average trends. In the previous article, we estimated Shell’s stock price forecast range based on its current implied volatility. Now, we’ll look at Shell’s dividend yield trend. Before that, though, let’s look at Shell’s dividend payment in the current quarter.

Shell’s dividend payments have stayed steady in the past few years. In the current quarter, Shell will pay a dividend of $0.94 per American depositary share, which it announced on January 31, 2019. Shell’s first-quarter dividend payment has remained steady compared to the first quarter of 2018.

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Shell’s dividend yield

Shell’s current dividend yield stands at 6.0%, up from 5.8% in the first quarter of 2018. The rise in the yield is the result of a fall in Shell’s stock price in the stated period. From the first quarter of 2018 to the first quarter of 2019, Shell stock has fallen 3%.

Shell has been taking measures to improve its shareholder returns. Shell plans to buy back shares worth ~$25 billion by 2020 to share the benefits of higher earnings and cash flows with its shareholders.

Recently, Shell announced the third tranche of its share buyback program. The company is expected to buy a maximum of ~$2.5 billion worth of shares until April 29, 2019, following the first and second tranches, during which it reported $4.5 billion of aggregate share buybacks.

Peers’ dividend yields

Shell’s peers with lower dividend yields include ExxonMobil (XOM), Chevron (CVX), Equinor (EQNR), and PetroChina (PTR). XOM’s, CVX’s, EQNR’s, and PTR’s current dividend yields stand at 4.2%, 4.0%, 4.9%, and 3.5%, respectively. Also, BP’s (BP) current dividend yield of 5.8% is marginally lower than Shell’s.

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