How Safe Is The Dividend Of Royal Dutch Shell?
Aristofanis Papadatos: July 10, 2017
Summary
*Royal Dutch Shell has not cut its dividend since World War II.
*However, its dividend growth rate has been lackluster at best during the last decade.
*Its dividend payout ratio is remarkably high while its net debt has almost doubled during the last 4 years.
*On the other hand, the company intends to sell $25 B of assets this and next year.
While Royal Dutch Shell (RDS.A) (NYSE:RDS.B) has retrieved half of its losses since it bottomed early last year, it is still 25% lower than its peak three years ago, just before the collapse of the oil price began. As the downturn in the oil market has already lasted longer than initially anticipated, with no light on the horizon yet, the shareholders of the stock are still in pain. Therefore, given that the generous dividend of the stock is the only consolation to the shareholders, it is important for them to evaluate how safe the dividend is. read more
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