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Four unnamed sources have told Reuters that Saudi state-run oil giant Aramco is in talks to potentially acquire Shell’s billion-dollar gas station business in Malaysia, where the Dutch supergiant owns a network of nearly 1,000 fuel stations.
Neither Shell nor Aramco would comment on the rumor of the talks for Reuters; however, one source told the news agency that talks began late last year and could be finalized in a matter of months.
A second source told Reuters that the deal could be worth over $1 billion.
https://oilprice.com/Latest-Energy-News/World-News/Saudi-Aramco-in-Talks-to-Buy-Shell-Gas-Stations-in-Malaysia.html
Because the trading hours for Shel and Brent are different, daily charts which compare the two can be slightly off because they use closing prices which are hours apart. This hourly chart of Brent since late January gives a more synchronised picture of the two:
https://invst.ly/14ps3v .
What is particularly striking is the divergence between the two that began in late March, with Shel now roughly 15% up on its price relative to Brent in mid March. At that time, $84 Brent would have been compatible with an sp of around 2500 rather than Friday's 2870. This does indicate that a revaluation of Shel has been in progress since the FY results and the question then becomes how permanent is it?
Well any notion that it might be temporary is probably mistaken, given a six year comparison of Shel against Brent: https://invst.ly/14ptc6 which shows that Shel’s sp is only now back at an equivalent level to that which existed prior to the OP War of early 2020 and COVID, which together caused the dividend cut and collapse in sp to below £10.
It's all looking good for Shel right now.
Shell pays 3.58% divis at current price, compared to 4% for Chevron, 3.37% for Exxon and 4.4% for BP. So it's not that, and historically 5-6% for all big oil is not unusual, and I hope we get back to $2 divis pa very soon. But I agree reducing debt is desirable, and that is one of the things they are doing, as well as reducing outgoings and increasing eps with the buybacks.
After BRK/B Shell is my largest holding, and is my biggest income generator (except in years when TGA goes mad); the mixture of capital gains and steady income suits me fine.
In my view SHEL’s & BP’s underperformance has been due to the 6% dividend
Compatriots like XON & CVX have paid around 4-4.5% yoy
I believe the dividend should be left alone, and move on, go buy more HSBC & LGEN if you want income
SHEL should be paying down the debt from previous acquitions and bond payments
If we crank it up it’s only going to be cut in bad times.
We need to follow NYSE trading as the likes have not cut yields.
Gla
NYSE and America is the way, this country is dragging itself down. Most people don't own shares unless in a pension and wealth is a dirty word.
Ed Milliband is proba ly the biggest threat to raised dividend
NYSE is obvious, but also Dax in Frankfurt wouldnt be a bad choice. Shell listed on LSE isn't the best fit post Brexit.
I normally drip my divis back into shares, but for some reason didn't last year. So my most recent purchase was in October 2022, at £22.68 per share. Since then 6 divis, totalling about £1.50, and the share price increased to today's £28.50, or roughly 25% gain. It's not bad, and I like the mixture of capital gain and income. The buybacks should also greatly increase eps, while saving a fortune in reduced payouts.
If the divi was increased back to 2019 levels, the screams of ersatz outrage from the likes of Rachel Reeves would be deafening.
Yep, certainly a matter of good housekeeping in that when it's politically expedient to increase the dividend, ie, when the economy is clearly robust, all we LTHs will see a meaningful benefit. However, I do understand the frustration of those who would prefer or need the cash up-front.
... absolutely Mrpippins, but some people need the income (cash) without having to sell up maybe?
I don’t see what the issue is with share buy backs for long term holders.
Shareholders get value through less liquidity in the market.
Change the listing to get shareholder value and use share buy back money to increase dividend
Sod buybacks for share price vanity, get the div back.
Never sell Shell!
Another vote for increase in divi rather than buybacks
Never sell Shell. No point commenting here as far as I’m concerned. I never worry about this one. It just does it’s thang.
A wonderful company to hold.
Just wish they would increase the cash dividend back to pre-Covid levels because they can easily afford it.
All IMHO DYOR
Happy
Has everyone sold shell???
Can we expect a dividend increase from shell on 2nd May???
Just read earnings call of Total Energies
There looking at possibilities of a NYSE listing too
Boyobach,
I am no fan of buybacks, they just muddy the figures. There is also the question of debt, which is also coming down too slowly.
Sawan can say that there is a valuation gap, however the dividend was cut, don't I know it, when I ended up buying more shares to get equivalent. Those like Exxon and Chevron did not so they deserve a higher valuation. We are still below the dividend before the cut several years down the line. I have been in this since 2015 so have enough experience with this company.
I have sold of 20% of my holding, so ready to sell more or buy back when the value is right for me.
Will they stop doing buybacks?
And how much cash have shareholder's missed out on since they cut the dividend?
For people who relied on that income it was quite a hit.
It's very difficult to assess the true value of buybacks to investors - is there a magic formula?
I think the theory is that an income investor should sell sufficient shares to top up the lost income and that the buybacks will maintain their overall value. I've never been convinced about that but could it be correct?
I don't think anyone picked up on this but it is an interesting question.
Current buyback is $3.5bn and there are just over 6.4bn shares (down from 8.3bn in July 2018). So the buyback is about $0.55 per share. Divi is $0.34 per share.
So if all money was distributed to shareholders as dividends, it would be about $0.89 per quarter, which is $3.56 per annum (or £2.85 at £1=$1.25) = about 10% of current share price
No wonder they think Shell is undervalued
Interesting thoughts Boyo. I am trying not to make my assumptions & targets particularly timebound this time, but I find it very difficult. Shell go Ex-Dividend on the 16th May, when I will be walking in Cumbria trying to pick up a phone signal no doubt! Obviously, if you buy back by then you qualify for the dividend, which as you say is a nice bonus. We are stuck with the Stamp Duty, which is roughly half the dividend on a similar level of purchase.
I am working on £28, as the high reached on the 18th October 2023, as being a rational view of where we should be now, without the conflict hype & spike above £29, which appears not to be sustainable without significant escalation in the Middle-East. Market reaction to Middle-East events seems to be almost spookily subdued at the moment. £27 or even £26 do look like realistic dips, but whether they will appear on the horizon before the 16th May remains to be seen. I really see this as negative bet territory, hoping for the share price to go down by a certain time, very weird. Ride the wave & good luck.
“3 UK oil stocks to invest in as Middle East tensions rise”
https://uk.investing.com/news/stock-market-news/3-uk-oil-stocks-to-invest-in-as-middle-east-tensions-rise-3441443
I doubt it, Israel just flexing its muscles in response to Iranian attack on Israel. Iran would be totally destroyed by Israel, USA and NATO allies if Iran did anything to threaten Israel. JMO.