Shell: Regaining Dividend Respectability And Shifting Toward Green Hydrogen
The Daily Drilling Report: 10 November 2020
Summary
- Shell is taking a healthy approach toward energy transition and balancing capital projects in terms of energy source.
- It’s also forging a leadership position in two key fuels that have been identified as being crucial to meeting Paris Climate goals – natural gas and hydrogen.
- Shell is back in our good grades with its recent dividend raise and strong earnings prospects going forward.
- At its recent price in the mid-$20s it represents a nice risk reward profile.
The question is, is the dividend safe? The answer here is yes, as it has just been raised. It seems Uncle Ben has heard the hue and cry of outraged shareholders, and is restoring some of what he took away just last quarter.
Ben Van Beurden, CEO Shell:
So we are announcing an increase of 4% in our dividends this quarter. But we’re also announcing a target milestone for our net debt of $65 billion for the near term. And once we have achieved this milestone, we target to further increase shareholder distribution. So we are not offering the promise of future growth, but also increasing shareholder distributions for the near term. read more
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