Diverse Income Share Discussion Threads

[the grumpy old men] 17/11/2017 12:47

When Will Royal Dutch Shell Raise Its Dividend?
Nov. 16, 2017 4:59 PM ET|
15 comments|
About: Royal Dutch Shell plc (RDS.A), RDS.B
Aristofanis Papadatos
Aristofanis Papadatos
Oil & gas, portfolio strategy, value
Aristofanis Papadatos
(3,118 followers)
Summary

Royal Dutch Shell has not cut its dividend since World War II.

However, the company has paid the same dividend for 15 consecutive quarters.

Therefore, the big question is if and when its shareholders should expect the next dividend hike.

Royal Dutch Shell (RDS.A) (NYSE:RDS.B) offers a generous dividend yield, which currently stands at 5.9%. Nevertheless, the oil major has paid the same dividend for 15 consecutive quarters. Therefore, as most of its shareholders are holding the stock for its dividend, it is only natural that they wonder if and when they should expect the next dividend hike.

First of all, Shell has an enviable record in dividend payments to its shareholders. To be sure, the company has not cut its dividend since World War II. This achievement certainly confirms the exceptional business performance of the company. However, the company has markedly slowed its dividend growth rate during the last decade, as it has raised it by only 2.7% on average during this period.

In addition, like the other oil majors, Shell has been pressured to a great extent by the prolonged downturn of the oil market and hence it has frozen its dividend for 15 consecutive quarters. More precisely, the company posted free cash flows of only $3.7 B in 2015 and -$1.5 B last year, which were clearly insufficient to cover the annual dividend payments of about $16 B. Consequently, the net debt (as per Buffett, net debt = total liabilities – cash – receivables), which also increased due to the acquisition of BG, has almost doubled in the last few years, from $87.8 B in 2012 to $150.1 B in the most recent quarter. The steep increase in the debt load has also resulted in doubling the annual interest expense of the company, which currently stands at $3.0 B. Therefore, the company has to reduce its debt load in order to reduce its leverage and its exposure to any unforeseen headwinds.

On the other hand, the company has taken the right measures during the ongoing downturn in its sector and hence it now seems to have left the worse behind. More precisely, it has reduced its operating expenses by approximately 25% during the last three years while it has also curtailed its capital expenses by 1/3. As a result, it has managed to achieve free cash flows of $16.8 B in the last 4 quarters, which are sufficient to fund the dividend payments. In other words, the company has managed to fully cover its dividend at an average oil price of $51. This achievement only confirms that the company has taken the right steps to withstand the environment of low oil prices. It is also remarkable that Shell has surpassed Exxon Mobil (XOM) in operating cash flows so far this year for the first time in about two decades.

While all the oil majors have enjoyed strong support from their refining segments during the current downturn, Shell has found additional support from its chemical segment. More specifically, while the price of oil is now half of what it was in 2014, the earnings of the chemical segment of the company have doubled, from $1.3 B to $2.6 B in the trailing four quarters. Therefore, this segment provides additional diversification to Shell under the prevailing low oil prices.

It is also worth noting that the management of Shell does not focus merely on the short-term results, like most managements. Instead it maintains a long-term horizon. This is clearly reflected in the recent acquisition of NewMotion, the owner of one of Europe’s largest electric vehicle charging networks. While the current scale of electric vehicles is negligible for an oil major, the management of Shell made this acquisition thanks to its expectations for electric vehicles to comprise about a quarter of the global car fleet by 2040. It is certainly encouraging that the management has such a broad horizon and tries to make the right moves well in advance to position the company before other large companies enter the market.

It is also important to note that the oil major is fine grading its upstream segment in order to be appropriately positioned to benefit from the next upcycle. More specifically, while this segment used to generate the vast majority of the total earnings of the company in the past, it is now only marginally profitable and makes up just 15% of the total earnings. Nevertheless, the management maintains a long-term scope and has thus invested in several blocks in Brazil’s offshore oil sector. In fact, the company secured half of the blocks offered in the tender. More importantly, the management believes that these blocks will prove profitable even at oil prices below $40. Therefore, while the company is disposing non-core assets to preserve its balance sheet, it is also investing in projects with really promising returns.

In reference to the prospects of a dividend hike, although the managements of the other oil majors have emphasized that their top priority is the dividend, the management of Shell has repeatedly stated that its top priority is the reduction of the debt load. Therefore, the management is not likely to raise the dividend for a few more quarters, particularly in the next quarter, when the company expects somewhat lower earnings due to extensive maintenance.

On the other hand, if the price of oil does not fall below $50 for a long period, the company will certainly start to reduce its debt load. Despite the booming shale oil output, the oil market is better balanced now than it was three years ago thanks to the drastic cuts of capital expenses of all the oil producers during this downturn. These cuts will soon start to take their toll on the total supply. Moreover, while the shale oil producers are likely to put a cap on any rally of the oil price, Saudi Arabia will do its best to support the oil price amid the upcoming IPO of Saudi Aramco next year. Therefore, while oil is not likely to return to the $100 level anytime soon, it is likely to remain around $50-$70 for the next few years. Such a range will certainly help Shell improve its balance sheet. In addition, as soon as the company becomes confident that the oil price will not plunge to $40s once again, it is likely to raise its dividend. Therefore, its shareholders can reasonably expect the next dividend hike to be announced during the second half of next year.

To sum up, Shell has taken the right steps in the ongoing downturn of the oil market and thus seems to have left the worse behind. As a result, the oil giant can fully cover its dividend at the prevailing oil prices. Therefore, as the oil market has become more balanced and the oil price is not likely to plunge to low $40s anytime soon, the company will be able to start reducing its debt load and will then be able to raise its dividend, probably in the second half of next year.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

[waldron] 16/11/2017 07:46

Shares buy backs at oil giant follow cost cutting drive which has taken toll on jobs in Aberdeen
BP to return billions more to investors after surge in profits

BP to return billions more to investors after surge in profits
0 comments

BP has launched a programme to return around $1.6 billion (£1.2bn) more cash to shareholders a year, after slashing costs in response to the crude price plunge and the Gulf of Mexico oil spill, writes Mark Williamson.

The oil and gas giant has become the first major to restart share buy backs since 2014, when the industry entered a deep downturn after the oil price fell sharply.

BP has shed around 900 jobs in the North Sea and sold off a range of what it deemed non-core assets in the area since 2014.

The company said last month it was planning to resume buy backs after third quarter profits doubled to $1.9bn. Chief executive Bob Dudley thinks BP has been put in shape to prosper if oil sells at $50 per barrel, compared with around $61.90/bbl yesterday.

BP noted its authority to buy back shares took effect yesterday. It will remain in place until the 2018 annual general meeting. The company will decide when to buy shares according to market conditions.

The buy backs will be used to offset the effect of paying around 20 per cent of its dividends in shares.

BP shares closed down 8p at 495p. They hit a two year high of 525p last week.

The cost of the 2010 spill off the US rose $0.2bn to $63.4bn in the third quarter.

[waldron] 16/11/2017 07:45

NICE POST JEFFIAN

ENJOY YOUR DAY

[waldron] 05/11/2017 21:48

the a shares seem to have already risen
but will they go further upwards and the difference reduce with the b share

volumes up for A

VOLUMES DOWN FOR B

Needs watching for some

[aleman] 03/11/2017 11:24

Centrica/CNA look interesting on a 7.2% yield.

[grupo guitarlumber] 02/11/2017 07:40

ROYAL DUTCH SHELL PLC 2018 INTERIM DIVIDEND TIMETABLE

The Board of Royal Dutch Shell plc today announced the intended timetable for
the 2018 quarterly interim dividends.

2018 Interim Dividend Timetable

4th Quarter 1st Quarter 2nd Quarter 3rd Quarter
2017 2018 2018 2018

Announcement date February 1, April 26, 2018 July 26, 2018 November 1,
2018 2018

Ex-dividend date (See February 15, May 10, 2018 August 9, 2018 November 15,
Note 1) 2018 2018

Record date February 16, May 11, 2018 August 10, 2018 November 16,
2018 2018

Scrip reference share February 22, May 17, 2018 August 16, 2018 November 22,
price announcement 2018 2018
date

Closing of scrip March 2, 2018 May 25, 2018 August 24, 2018 November 30,
election and currency 2018
election (See Note 2)

Pounds sterling and March 9, 2018 June 4, 2018 September 3, December 6,
euro equivalents 2018 2018
announcement date

Payment date March 26, 2018 June 18, 2018 September 17, December 19,
2018 2018

[the grumpy old men] 27/10/2017 15:40

Total: what program for the dividend?
Photo credit © Total

(Boursier.com) - The Board of Directors of October 26th decided to fix at 0.62 euro per share Total the amount of the 3rd installment for the 2017 financial year. This deposit is of an amount identical to the 1st and 2nd installments proposed for the 2017 financial year. It will be posted on March 19, 2018.

The Board of Directors will meet on March 14, 2018 to:
- decide to distribute this 3rd interim dividend;
- propose, under the conditions set by the 4th resolution of the Combined General Meeting of May 26, 2017, the option of paying this installment in new shares of the company;
- fix the issue price of each new share at a discount between 0% and 10% on the average of the first prices quoted on Euronext Paris during the 20 trading days preceding the Board of Directors, less the amount of this down payment ;
- set the option period for the payment of the interim dividend in new shares between March 19, 2018 and March 28, 2018 inclusive;
- decide whether to pay in cash or new shares, depending on the option chosen, as of April 9, 2018.

[ariane] 27/10/2017 08:28

Total S.A. Total Announces Its 2017 Third Interim Dividend
27/10/2017 7:20am
UK Regulatory (RNS & others)


TIDMTTA



The Board of Directors of Total (Paris:FP) (LSE:TTA) (NYSE:TOT) met on October 26, 2017, and approved a 2017 third interim dividend of 0.62 euro per share. This interim dividend, unchanged compared to the proposed 2017 first and second interim dividends, is payable in euro according to the following timetable:


Ex-dividend date March 19, 2018
Record date March 16, 2018
Payment date in cash April 9, 2018
or shares issued in lieu of cash



The Board of Directors will meet on March 14, 2018, to:



-- declare the 2017 third interim dividend;

-- offer, under the conditions set by the fourth resolution of the

Combined Shareholders' Meeting of May 26, 2017, the option for

shareholders to receive the 2017 third interim dividend in cash or in

new shares of the Company;


-- set the issuance price of the new shares with a discount between 0%

and 10% based on the average opening price on the Euronext Paris for

the 20 trading days preceding the Board of Directors' meeting, and

reduced by the amount of the 2017 third interim dividend;


-- set the period for shareholders to elect to receive the payment in new

shares from March 19, 2018 to March 28, 2018, both dates inclusive; and


-- authorize the payment of the dividend in cash or the delivery of

shares issued in lieu of the dividend in cash on April 9, 2018.



Holders of Total's American Depositary Receipts ("ADRs") will receive the 2017 third interim dividend in dollars based on the then-prevailing exchange rate according to the following timetable:


ADR ex-dividend date March 15, 2018
ADR record date March 16, 2018
ADR payment date in cash April 16, 2018
or shares issued in lieu of cash



Registered ADR holders may also contact JP Morgan Chase Bank for additional information. Non-registered ADR holders should contact their broker, financial intermediary, bank or financial institution for additional information.



About Total



Total is a global integrated energy producer and provider, a leading international oil and gas company, a major player in low-carbon energies. Our 98,000 employees are committed to better energy that is safer, cleaner, more efficient, more innovative and accessible to as many people as possible. As a responsible corporate citizen, we focus on ensuring that our operations in more than 130 countries worldwide consistently deliver economic, social and environmental benefits.



* * * * *

[aleman] 26/10/2017 14:17

CNCT increased their dividend this morning to yield nearly 11%. The shares have risen, though. Still nearly a 10% yield with further rises forecasted.

[grupo guitarlumber] 25/10/2017 11:28

France's Vinci SA (DG.FR) said on Tuesday that its third-quarter revenue rose 7% from the year-earlier period, bolstered by the expansion of its airport business.

Vinci's revenue in the third quarter rose to 10.67 billion euros ($12.56 billion), exceeding a consensus forecast of EUR10.39 billion provided by FactSet.

Revenue from Vinci-operated airports rose 31% in the third quarter, while revenue from its toll roads was up 2.4%.

The construction and infrastructure operator confirmed its guidance for 2017 as it expects revenue and net profit to keep growing, driven largely by recently-signed contracts to operate airports in Japan and Brazil.

Despite a weak construction market in France, and government cutbacks on infrastructure spending, Vinci has managed to raise profitability over the past couple of years by expanding abroad in businesses such as airports and toll roads.

The company will pay an interim dividend of EUR0.69 per share on Nov. 9.



Write to Marc Navarro Gonzalez at [e-mail]



(END) Dow Jones Newswires

October 24, 2017 12:34 ET (16:34 GMT)

[waldron] 08/10/2017 07:38

LONDON: A “generous̶1; dividend policy would help to align the interests of Saudi Aramco investors and the government, S&P said in a report.
The rating agency noted that a reduction in income tax rates for the larger hydrocarbons producers earlier this year means that the government will be encouraged to push the national oil company to offer attractive dividends when it floats.
A plan to list Saudi Aramco in 2018 is on track, the company’s CEO confirmed this week. The flotation of about 5 percent of Saudi Aramco is a centerpiece of Vision 2030, a wide-ranging reform plan to diversify the Saudi economy beyond oil.
The Kingdom this year reduced the tax rate for the largest oil producers like Saudi Aramco to 50 percent from 85 percent. That is in addition to a 20 percent royalty payment the company makes to the government.
“The government will now be incentivized to encourage Saudi Aramco to follow a generous dividend policy to compensate for the reduction in tax revenues,” said S&P in a report published over the weekend that affirmed the Kingdom’s ratings.
“In this way, the interests of investors and the government will be more aligned,” it said.
Because the ultimate use of the proceeds from the IPO has not yet been defined, S&P did not factor them into its projections for the non-oil economy which it expects to grow by about 1 percent this year and next.
The Kingdom is expected to “consolidate its public finances to ensure liquid assets are maintained” close to total economic output over the next two years, S&P noted.
The agency affirmed its foreign and local currency rating and said the country had a stable outlook.
Saudi Arabia last year announced the National Transformation Program (NTP) — which offers structure and detail to Vision 2030, the country’s blueprint for economic and social transformation.
Among the targets included in the plan is the creation of 450,000 private sector jobs by the end of the decade and an increase of the private sector’s share of the economy to 60 percent from 40 percent in 2014.
It also aims to boost education and increase home ownership to 52 percent by 2020 from 47 percent.
The total budgeted cost of the NTP is more than SR268 billion ($71.4 billion) — or about 12 percent of gross domestic product (GDP).
S&P expects the NTP could result in “accelerated economic growth” and an overall rebalancing of the economy.
But it noted that much depends on achieving challenging targets over a number of years.
The construction sector in the Kingdom still faces payment pressures and the industry accounts for about 8 percent of total bank loans, S&P estimates.
It expects non-performing loans to rise to between 2 percent to 3 percent over the next two years from about 1.4 percent at the end of last year — largely due to construction exposure
S&P said it expected Saudi Arabia’s external and government balance sheet positions to remain strong over the next three years.
The IMF last week estimated that the Kingdom may get a budget boost of more than $90 billion by 2020 from new taxes and changes to subsidies but cautioned that it should slow the pace of reforms.

[praipus] 23/8/2017 22:02

DIVI seem almost apologetic for having PUT option insurance in place. I actually don't understand why so many trusts dont use Options for Insurance!

Surprised the FSA hasn't insisted that all trusts have an auditable rolling PUT options systems in place to protect investors especially those trusts with high levels of structural gearing, bank debt and broker facilities.

In hindsight after good years it looks like a waist of money just like insurance but one tiny little 1987, 9/11, 2007/8 LTCM moment and we could be very greatful.

[peterbill] 22/8/2017 21:36

RESULTS FOR THE YEAR TO 31 MAY 2017

3.00p of ordinary dividends for the year The three interim dividends and the proposed final dividend for the year amount to 3.00p, compared with 2.80p in the previous year, an increase of 7.1%. The Company has also recommended a special dividend of 0.40p per share, which reflects a year when many special dividends were also paid by the companies in the portfolio.

Revenue reserves increased to £15.5m Revenue reserves of the Group increased to £15.5m over the year. The reserves of the Company are available to be used to smooth the dividend distributions to shareholders in future years.

13.6% growth in capital The net asset value (“NAV”) per share rose from 91.02p to 103.43p over the year. This compares with an increase in the FTSE All-Share Index of 20.0% over the year to 31 May 2017.

[ariane] 04/8/2017 20:43

Claude Leguilloux, published on 04/08/2017 at 09h46
Engie: innovation

(Boursier.com) - Engie is closed this Friday on the 13.70 euros, while Credit Suisse has adjusted up its target price on the record to 13.2 euros. The group's organic growth was 2.6% in the first half of 2017, with a turnover of 33.1 billion euros. On the same basis, EBITDA rose 4% % To 5 billion euros and current operating income of 2.5% to 3 billion euros.

Recurring net income Group share showed solid organic growth of 15.5% at 1.5 billion euros. On the other hand, operating cash flow contracted quite sharply, from 4.7 to 3.5 billion euros. The group explained that it is making progress towards a more innovative, efficient and sustainable structure, as it is ahead of its transformation plan set for the period 2016 to 2018. In particular, The portfolio turnover program is 73% complete, while the investment program is 85% secure. Finally, the current performance program is already 90% complete. Net debt decreased by E1.2 billion in six months, to 22.7 billion euros (20.9 billion euros excluding internal E & P debt).

Confirmation

Engie confirmed for the current financial year a recurring net profit attributable to the group of between 2.4 and 2.6 billion euros, expected to be in the middle of the range and a net debt / EBITDA ratio of 2.5 times or less. The continuation of the credit rating in Category A is also part of the commitments.

Finally, management still promises a dividend of € 0.70 per share for 2017, payable in cash. "The first half of 2017 was marked by a strong commercial momentum and a very good performance of our growth engines," said CEO Isabelle Kocher, while low-carbon electricity generation, infrastructure and solutions Now account for 90% of EBITDA.

[grupo guitarlumber] 02/8/2017 10:00

Alan Oscroft | Wednesday, 2nd August, 2017 | More on: DTY DVO
William Murphy. Licence:

One of my favourite ever headlines from The Onion was World death rate unchanged at 100%, and as long as that remains true, the long-term customer base for Dignity (LSE: DTY) seems pretty much guaranteed.
Earnings per share almost doubled at the UK’s’ largest funeral operator between 2012 and 2016, and investors piled in and created a typical growth spike, The share price soared, but from round the middle of 2015 it’s been pretty flat, and today stands at 2,552p.
Early earnings growth looks set to cool, with analysts expecting just a 4% rise this year, but Wednesday’s interim results suggest…

[aleman] 19/7/2017 15:36

People not averse to a bit of small cap risk might want to look at NAH. THe forward yield is over 10% - that's the forecast following cut from 15% after legislative changes, which now might even be slightly delayed. They updated today to say things were on track.