Polliesdividend

Shell update (unaudited)

Today Shell came with an update on fourth quarter of 2015. These are the unaudited results. This because next week a special shareholders meeting will be held on the take over of BG.

As was to be expected the net profit has been slashed due to the oil prices. As we all know the oil prices are at a 12-years low (and still going down). Their cash flow from operations is expected in the range of $29.2 – $30.4 billion. (2014: approx. $ 45 billion).

The net profit over 2015 will be in the range of $10.4 – $10.7 billion. In 2014 it was around $ 15 billion!

Of course shell will be taking a sorts of actions to improve their profit. On the basis of the information given, I have a good feeling about the company’s management. But what about my dividend? This is an important thing for a DGI .

Luckily their update also gave information about their dividend.

Underscoring Shell’s commitment to returns to shareholders, dividends declared for 2015 are expected to be $1.88/share or $12 billion, and for 2016 at least $1.88/share or, assuming successful completion of the combination, $15 billion in total.

So the management has the intention to leave the dividend untouched, also for this year. This is good!

On the basis on the update it can be concluded that their payout ratio will be very high! And they need to take serious action in 2016 to secure the dividend for 2017. And, yes I understand that if the oil prices will rise again, it will be much easier for Shell.

As a shareholder I will not take action at this point. First lets see what the results of the action by the management will be. I have full confidence but I will be watching the stock closely.

My Vrijheid Fonds consist of 320 shares of RDS. So my projected net dividend income for 2016 will be approx. € 470.

What do you think about Royal Dutch Shell? If you have money invested in RDS, are you going to take action? Let me know.

Cheers,

Pollie

I’m long in RDS-A
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6 thoughts on “Shell update (unaudited)

  1. ambertreeleaves

    Shell is part of my portfolio as well. I own the RDS.A shares and try to get some extra income with options.
    My average buying price i sweel above the current market price. I consider shell as a dividend stock in my portfolio. thus, as long as the dividend comes, there should not be a problem.

    I am curious to see what the oil supply will look like in 2016… If it stays low like this, a cut is not impossible.

    I do consider adding some more in the coming weeks.

    1. Polliesdividend Post author

      Hello,
      Thanks for stopping by.
      I’m also curious what oil will do in 2016. If the price stays this low, a dividend cut will come.
      I also thinking about adding some more RDS

      Cheers,

      Pollie

  2. Stalflare

    Ciao Pollie,

    Same for me, I am into RDSB (London) just for the dividend, if they cut it it’s not a tragedy, if they remove it I might sell them at a loss.. The company is sound, but the BG merger is going to stretch their finances, so if oil doesn’t recover the cut/suspension is almost certain in 2017… Of course I hope not, but at the present moment I prefer not to add more energy positions… Ciao ciao
    Stal

  3. Team CF

    Hey Pollie,
    Nice piece. We have been discussing this one lately, we think that the price of oil won’t recover fast enough to avoid a dividend cut. But considering the strong credentials of this company, we have already invested in it and will increase the position in the future. However, we don’t think that the “bottom” is reached just yet.
    Cheers.

    1. Polliesdividend Post author

      Hello TeamCF,
      I agree that the bottom has not been reached.
      Knowning this, I Still think RDS is a great company. And I also still think of RDS when I choose new stocks to buy.

      Cheers,

      Pollie

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