Shell's profits slashed, yet dividends rise?
An interesting move from Shell to raise its dividend, even as its profits are slashed by the impact of the pandemic.
"Royal Dutch Shell raised its dividend for a second consecutive quarter despite an 87 per cent drop in earnings on lower energy prices, reduced production and weaker refining margins. For the three months to December 31, the Anglo-Dutch oil major’s net income adjusted for cost of supply — Shell’s preferred profit measure — dropped to $393m. This compared with $2.9bn in the same period a year ago and was short of analysts estimates of $597m"
Its only a small(ish) rise in the dividend payment, but its a move back towards making Shell attractive to income-seeking investors, after last year's dividend cuts.
Since the Shell stock is held by a large number of pension funds, this is probably good news for most people's pension funds.
Hopefully 2021 will bring the return of dividend payments from other previously regular divi payers, who cut payments during 2020.