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Will Royal Dutch Shell Raise Its Dividend?

Published Wed, 13 Mar 2019 21:35:59 -0400 on Seeking Alpha

Royal Dutch Shell (RDS-A)(RDS-B) is currently offering a 6.1% dividend yield and thus it is a high-yield dividend stock.
While Shell has an exceptional dividend record, it has paid the same dividend for 20 consecutive quarters. This is in sharp contrast to Exxon Mobil (XOM) and Chevron (CVX), which have raised their dividends for 36 and 32 consecutive years, respectively.
Therefore, the big question is whether Shell will follow its peers or it will keep its dividend frozen for many more years.
Dividend record
Shell has an exceptional dividend record, as it has not cut its dividend since World War II. It is the only energy company that can boast of such an achievement, as the energy sector is highly cyclical and hence it does not allow the companies of the sector to maintain long dividend streaks. Therefore, the achievement of Shell is a testament to the strength of its business model and its business execution. On the other hand, as its current dividend has remained frozen for 20 quarters in a row, it is only natural to wonder whether the dividend will be raised or it is at risk of being cut at some point in the future.
Shell is currently offering a 6.1% dividend yield, which is much higher than the 4.2% yield of Exxon Mobil and the 3.9% yield of Chevron. At this point, it is critical for investors to realize the main difference between the A and B class of the shares of Shell. The owners of the former are obliged to pay a 15% tax on their dividends whereas the... Read more