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There There must be alot of pd off people though, most folk over the past two decades have had to buy at a sp over twenty quid, divs received aside... Will take a long time for them to get back above water... Not complaining too much myself, as I'm heavy into oil stocks, fortunate to top up BP at 2.00, don't think rdsb owes me much either...
Yield isn’t everything and ‘the way we were’ depends on who you are - it isn’t the same for everyone. Hence the preoccupation for some for the sp to get back over £20. But - if they took the hit and sold - where would they invest the proceeds in order to have better dividend and growth prospects? It may be better to sit back and not stress about the price every day, like Char does (not).
On yield, we should remember that the share price dropped sharply in August 2019 pushing the yield up. Indeed, RDS had reached sp’s of up to £28 in 2018 and I guess the yield prior to 2020 must typically have been around 5%? That would point to an sp of £13.80 today if yield was the only consideration. Of course, there are circumstances where even small but reliable yields can be attractive with the level reflecting low risk and the prospects for growth.
Chevron has not cut its dividend and on a comparative basis (RDS and CVX sp’s tracked quite closely prior to the RDS cut) RDS’ sp might have been around £20 today had it also held the dividend and matched CVX: https://invst.ly/vlapf
However, the yield under those circumstances would have been approaching 7% today, a high rate reflecting perceived risk associated with things like debt level - which RDS has now reduced and the possibility of an eventual dividend cut, which RDS has already done.
Those who traded RDS as it fell to below £9 and are consequently holding at genuinely bargain prices have little to complain about - the dividend is now good and reliable at any average price below £14 and the prospects for gains are high as OP tightens, demand recovers and RDS’ CFFO continues apace.
The best thing, in my view, is to assume that 24c is the new 47c and to take it from there.
"When they cut the divi they did say there would be a greater proportion of cash flow returned to shareholders via buy backs and divis once debt was paid down"
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Which is what we are seeing now....surely!
When they cut the divi they did say there would be a greater proportion of cash flow returned to shareholders via buy backs and divis once debt was paid down
"In Yield terms, though, it is roughly 75% of the figure at 31 Dec 2019, as it is being paid out from a lower share price. In annualised terms a 24c dividend would be about 4.8% yield, compared to a 6.3% yield for the year to 31/12/2019."
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Lutra, isn't that a 'chicken & egg' scenario?....dividends are roughly half what they were pre-pandemic. But yield is greater % because the SP is lower.
I suppose the big question is what Yield (or dividend) are the management aiming to maintain over the coming years. Are they aiming to return to circa 47c per quarter?!....which would probably drive the SP higher. Chicken or egg.
I suspect 47c per quarter isn't realistic....but what should we expect? Is 24c the new 47c?....I could live with that but others would want more.
Hi Lutra
I agree with you in the main there, I'm comparing pre pandemic div to current div. Think most mine bought pre covid so that's the reference I used.... In fairness pre covid purchase for me is prob decades ago, so my yield is likely still to be high... Atb but still would be nice if div doubled....
dadean, you are confusing the cash value of the dividend with dividend yield.
In value terms, if the 24c payment is annualised at this morning's share price and exchange rate, then the payment is indeed very roughly half what it was at 31 Dec 2019 (ie before the pandemic).
In Yield terms, though, it is roughly 75% of the figure at 31 Dec 2019, as it is being paid out from a lower share price. In annualised terms a 24c dividend would be about 4.8% yield, compared to a 6.3% yield for the year to 31/12/2019.
If you are calculating yield on a historic cost basis, then it depends on the actual price you paid for the shares and how you choose to discount that price to account for inflation or opportunity cost.
Missed the word half above... Half pre pandemic yield. But could be wrong
Think I found it, pre pandemic div 47c next div possibly 24c so still roughly pre pandemic yield, however there will be additional buy back yield... Guess BP payout slightly higher..
Thanks Grippa and everyone who posted, id been wanting to compare current div to pre pandemic div, I'll have a search later, but good news of course
Excellent all round
Great results today, share price rise, buybacks, increased dividends, oil price at $74, long may this continue.
Sorry 38%
Dadean
Think previous divi 16.65 and 17.35 so increase from latest is indeed 37%
Sorry 38% increase
Thanks, I don't but someone earlier said its a 36% increase in divi
Sounds good Grippa, do you know the new div in cents vs before last year reduction? Indeed think further upside on this and BP, throwing off cash
Surprised not got a much bigger rise in SP, would like to think it still has I bit to go while allowing people to digest the news, 5% dividend going forwards at these prices whats not to like!!