Sharecast.com: Dividends: BP and Shell in focus: “Shell shares yield 3.5%, about the market average, compared with BP’s 2.8%. The reserves fiasco at Shell probably accounts for the gap.” (ShellNews.net) Posted 12 Feb 05
LONDON (SHARECAST) - In a regular weekly round up of the key dividend developments, this week it’s time to look at BP and Shell
Oil giants BP and Shell have both been making hay out of oil prices at between $40-50 per barrel, though on the dividend front BP investors look to have come out marginally ahead this year.
BP enjoyed a record year for profits and a forecast-busting fourth quarter raking in $16.2bn for the 12 months.
Chief executive Lord Browne, with his normal ebullience, also maintained a positive outlook for the year ahead.
He announced plans to return up to $23bn to shareholders during 2005 and 2006 through share buybacks and dividends, assuming oil prices remain above $30 a barrel.
As a starter, the fourth quarter dividend rose 26% to 8.5 cents, reflecting a “significant one-time step-change”.
Browne also added that some of the excess cash could be used for material acquisitions, although he was adamant that no such opportunities existed at present.
Just a week earlier Shell also posted its best-ever annual results as it made a profit of £295 per second.
On the downside the group made yet another reserves cut, but Shell says now that it has finally completed its proved reserves reviews for 2003 and the years before.
Shell’s results trumped expectations with a 134% rise in fourth quarter net income to $4.5bn, while for the full year income rose 48% to $18.5bn.
The dividend rose by 7.6% to 16.95p with chief executive Jeroen van der Veer adding, “We expect to pay out at least $10bn in dividends in 2005 and will re-launch our share buyback programme.”
Shell shares yield 3.5%, about the market average, compared with BP’s 2.8%. The reserves fiasco at Shell probably accounts for the gap.
But given that the share prices of both have risen by about a third in the past twelve months, the relative generosity of both yields underlines the strength of the sector at present.