Shell share price: Group prepares to restore cash dividend

Expectations for move rising ahead of investor day

Shell share price: Group prepares to restore cash dividend

Royal Dutch Shell (LON:RDSA) is expected to resume paying all its dividend in cash this week, The Sunday Times has reported. Chief executive Ben van Beurden is likely to signal the move tomorrow when the Anglo-Dutch oil major is scheduled to hold a Management day in London.

Shell’s share price has been little changed in London this morning, having inched 0.09 percent lower to 2,335.50p as of 08:29 GMT, in line with the broader UK market, with the benchmark FTSE 100 index currently standing 0.06 percent in the red at 7,405.48 points. The group’s shares have added more than 16 percent to their value over the past year, and are up by some four percent in the year-to-date.

Shell to signal end of ‘scrip’ dividend

The Sunday Times reported yesterday that Shell is expected to announce the end of its ‘scrip’ dividend, with the company currently making a proportion of its payments to investors in the form of new shares rather than cash. While the use of the scrip dividend has helped to ease the strain on the group’s balance sheet, the Anglo-Dutch oil major is now in a healthier financial position having agreed to sell almost $25 billion of assets.

The newspaper notes that analysts believe that the company is likely to use a management day tomorrow to end the scrip dividend or to set out a timetable for its removal, in a boon for investors in the stock.

“Anything but a clear commitment to remove the scrip dividend within a defined time frame could be taken as a disappointment,” Biraj Borkhataria, an analyst at RBC Capital Markets, commented, as quoted by The Sunday Times.

Analysts on Shell

Barclays remains bullish on the Anglo-Dutch oil major, having reiterated its ‘overweight’ stance on the company last week, valuing the shares at 2,850p. According to MarketBeat, the company currently has a consensus ‘buy’ rating and an average price target of 2,463.19p. 

As of 08:55 GMT, Monday, 27 November, Royal Dutch Shell Plc 'A' share price is 2,334.00p.

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