Addressing The Royal Dutch Shell Dividend Concerns
Christopher F. Davis: Aug. 27, 2015
Summary
- Shares of oil majors have been crushed and Shell is no exception.
- Concerns over the dividend are being raised.
- I discuss the possibility of a dividend cut and what I see as likely happening.
Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) has been crushed in the last three months, and of course, over the last year since oil began its selloff. At the time of this writing oil is rebounding back above $40, but I wanted to address something very important about the stock. Its dividend. I recommended it in several articles, and explained the differences between the two types of shares. Through dividend compounding, this stock belongs in your portfolio, particularly a tax advantaged retirement account. But there has been whispers of fear that because of the oil slump, profits will be decimated and as such the dividends are in jeopardy. While the threat to profits is real, the concerns over the dividend are far overblown. I strongly believe that the dividend is more than safe. And at a 7.6% yield, you should be buying hand over fist at these levels and lower.
The TRUTH will set you FREE.
Yereth Rosen
