Shell’s dividend gusher can survive a prolonged siege
If the oil price stays low, Shell’s van Beurden may have to eat his words Photo: AFP
Sunday Telegraph: Jeremy Warner: 20 Sep 2015
Ben van Beurden, chief executive of Royal Dutch Shell, is on a charm offensive to convince investors – and the press – that both the dividend is safe and the pending £45bn takeover of BG Group will proceed as planned. These promises attempt to address what is in essence the same underlying worry – the low oil price and its prospects for recovery.
In each case, the markets are plainly sceptical. Shares in Shell are on a barely believable yield of more than 7 per cent, indicating a high probability of a dividend cut to come, while BG shares trade on a discount of more than 10 per cent to the see through value of Shell’s offer.
The TRUTH will set you FREE.
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