RDSB Sterling Equivalent Q2

[Mentallurgist]

This may be of interest :-


Royal Dutch Shell

Q2 2018 Euro and GBP Equivalent Dividend Payments

Dividends on B Shares will be paid, by default, in pounds sterling at the rate of 36.50p per B Share. Holders of B Shares who have validly submitted euro currency elections by August 24, 2018 will be entitled to a dividend of €0.4048 per B Share.

This dividend will be payable on September 17, 2018 to those members whose names were on the Register of Members on August 10, 2018.


https://www.investegate.co.uk/royal-dut ... 1220PB161/

[Breelander]

This may be of interest...

It is - thanks

[moorfield]

Which is a year-on-year decrease of 6.8%, from 149.20 to 140.61p.

[Breelander]

Which is a year-on-year decrease of 6.8%...

...entirely due to exchange rates. The dividend in the USD accounting currency is exactly the same this year as last.

[moorfield]

Which is a year-on-year decrease of 6.8%...

...entirely due to exchange rates. The dividend in the USD accounting currency is exactly the same this year as last.

Hm. A flat USD divi and a decreasing GBP one. And I thought RDSB was a HYP "stalwart" ...

[Breelander]

I thought RDSB was a HYP "stalwart" ...

A dividend that hasn't been cut since 1945 and has a CAGR of 6% over 15 years - that why I've held them in my HYP since 2001.

[Dod101]

Hm. A flat USD divi and a decreasing GBP one. And I thought RDSB was a HYP "stalwart" ...

It should not need such an announcement to tell you that. We all knew that Shell has held its dividend and since it declares in US Dollars, the sterling dividend is entirely at the mercy of exchange rates. Recently sterling has been up and down against the US Dollar (as it usually is). Better get used to that; it will no doubt continue its volatility against the Dollar.

Dod

[idpickering]

I regard Shell RDSB as very much one of my HYP stalwarts. I think we could all use a company such as this as a solid backbone to our HYPs. As for the exchange rate issue, I'm fully aware of that fact, and accept it. It adds to the diversification of my HYP in effect. Sadly (or not) I've got a full tank of Shell, or I would be buying even more.

Ian.

[pyad]

A dividend that hasn't been cut since 1945 and has a CAGR of 6% over 15 years - that why I've held them in my HYP since 2001.

Whilst that may be true about 1945, I haven't checked, it's a little misleading in that it implies annual increases. In fact, though it may not have cut, Shell has on occasion held its dividend for some years. The dividend record on their website goes back only to 2006 but just in that time it held twice, at 168¢ for the three years 09-11 and at 188¢ for the three years 14-17 with the first two Qs for 18 also at the same level of 47¢ so far for this year.

I do rate RDSB as a Buy, but dislike the half story of never having cut its payout since 1945, a comment which I've seen many times.

[OhNoNotimAgain]

Focussing on the dividend per share is one of the most misleading, out of many competitors, figures used by financial pundits.
It totally ignores the other important component in the equation which is the number of shares in issue.
Shell issued a bucket load of equity to buy BG, a not very big dividend payer, then promised to pay the same dividend per share on those as on the pre-existing Shell shares. As a consequence Shell's dividend payment increased enormously and put the company in a tight cash squeeze. Which it could survive because of its strong balance sheet.

It will soon start buying back equity which will of course result in a proper dividend cut, but not on a per share basis.

For those that pick stocks a look at the cash flow statement every year is worthwhile.

[pyad]

I meant of course the four years 14-17 where they paid the same 188¢, not three, which makes it even worse. If they repeat this for 18, which so far they have for Qs 1 and 2, it will be five years at this level.

[Dod101]

It will soon start buying back equity which will of course result in a proper dividend cut, but not on a per share basis.

Buying back equity is exactly what it said it would do when it could afford to, to reduce the inflated number of shares issued to help finance the acquisition of BG. If it merely maintains the dividend per share that will reduce its dividend cost but will not of course be seen as a cut to continuing shareholders. It may even be that it will give Shell some headroom to increase the dividend per share in the not too distant future.

They made their announcement on 26 July and from their RNSs they have been buying back their own shares almost on a daily basis since that date and this is planned to continue up to 2020.

Dod

[vrdiver]

Focussing on the dividend per share is one of the most misleading, out of many competitors, figures used by financial pundits.
It totally ignores the other important component in the equation which is the number of shares in issue.
Shell issued a bucket load of equity to buy BG, a not very big dividend payer, then promised to pay the same dividend per share on those as on the pre-existing Shell shares. As a consequence Shell's dividend payment increased enormously and put the company in a tight cash squeeze. Which it could survive because of its strong balance sheet.

It will soon start buying back equity which will, of course, result in a proper dividend cut, but not on a per share basis.

For those that pick stocks a look at the cash flow statement every year is worthwhile.

No argument with the cash flow point, but as a HYPer, not a pundit, I don't give a monkey's about the total dividend paid by the company (and hence ignore stuff like "total dividends paid by FTSE went up/down" etc) but am very interested in my allocation of the dividends - i.e. DPS.

In the case of Shell, my understanding is that they need time to digest the BG acquisition, which involved issuing, and now repurchasing, a bunch of shares. That has an impact on the total dividends payable by RDSB (and I accept therefor on my dividend per share) but in many respects it's the same as if they had borrowed cash at a rate of interest equivalent to the dividend payment: the total dividends payable would be less, but the cost to the company would be the same and the impact on their ability to increase dividends also the same. Issuing shares was, I presume, the most cost-effective way of raising the required cash at the time; now they're paying it back.

In summary, the reason for any change in the number of shares in issue needs to be understood, as well as the future plans for those shares (e.g. are they long-term, or an alternative to short-term debt).

VRD

Disclosure: I've held RDSB since 2007 (with top ups in '12, '13 and '15) and sho a XIRR of 8.8% with 5 and 10 year dividend CAGRs of 4.8% and 6.8% respectively.

[scrumpyjack]

The Shell share price is about 25% higher than when it issued shares for the BG acquisition.

It is also, like BP, buying back shares to counter the dilution from issuing shares instead of paying a cash dividend to shareholders who opted for scrip. Those shares will cost a lot more to buy back than the cash 'saved' by not paying those dividends in cash.

Overall this is very much more expensive than having funded it by borrowings, but of course they could not have been certain that the oil price was going to bounce back so strongly.

[Dod101]

Issuing shares was, I presume, the most cost-effective way of raising the required cash at the time; now they're paying it back..

Strictly speaking of course they did not raise cash, they simply handed over newly minted shares of equivalent value. That avoided having to increase their debt profile but meant that the dividend cost, if it was to be maintained on a per share basis, was a lot more. As someone said, they no doubt issued each share against a much lower value than the cost of buying them back today, and maybe they could have borrowed at a lower rate than the 6% plus cost of the dividend. But that is all being wise after the event. The fact is they are now embarked on a plan to substantially reduce the number of shares in issue and that only be of benefit to continuing shareholders.

Dod