Apr 30, 2020

Royal Dutch Shell: payout cut ends value era

A few ancient watering holes, the Bank of England at Threadneedle Street and the rock solid Royal Dutch Shell dividend. Shell is an enterprise that usually considers its shareholder payout before confirming investment spending. So what has changed? Unprecedented negative prices for the US benchmark West Texas Intermediate may have confirmed diminishing oil storage space in the US. Shell has not said anything about shutting down any of its operating wells. Rather than suspend the dividend, they cut it, sending shares down more than 6 per cent. Should Shell have held on to its dividend, or was this the right move for shareholders long term? The Lex team is interested in hearing more from readers.

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