Dividend Consistency Remains a Way of Life at Shell
One of the time-honoured traditions when it comes to investing is that Royal Dutch Shell would offer an inviting dividend that somehow managed to increase each year, a stretch that dates back to World War II. That led many to place their faith in the company, with an eye toward the future.
Those same people are now likely showing more concern after two years of drops in oil prices and only intermittent interludes where the amount reached half of what it was at its peak. Given the growing influence of the shale industry, that impact may be felt for years to come.
Attempts at limiting overall supply from OPEC countries have been met by cunning strategies by countries like Saudi Arabia. In the latter case, the deeper pockets of the Saudis were being used as a way to drive those shale companies out of business.
At the end of July, that Shell dividend was at 47 cents, which maintains the streak. However, the fall came before the pride since the company saw a steep quarterly drop in earnings. Of late, one of the ways to balance the books has been to cut costs while another has been to sell off mature or otherwise revenue-neutral properties.
Knowing that such industry changes were on the horizon, coupled with the continuing push toward different forms of renewable energy, Shell has made their own investments to tap into those markets. The liquefied natural gas (LNG) market is one that’s shown inviting potential, especially considering that new environmental regulations instituted in 2015 demand that ships reduce local emissions.
That may serve as a bridge until the oil market gets back to the time before the oil market crash. If that somehow never occurs, it helps to have a potential growth property lying in wait.