Exxon Mobil Maintains Dividend; Royal Dutch Shell Cuts Dividend Payout


Exxon Mobil Corp (XOM) announced that it is maintaining its quarterly dividend even as the spread of the coronavirus pandemic curtails energy demand and pushes oil prices down.

The U.S. oil producer’s Board of Directors declared a cash dividend of $0.87 cents per share on the common stock, payable on June 10 to shareholders of record of common stock at the close of business on May 13.

Earlier this month, Exxon Mobil said it is slashing planned capital spending by 30% this year to combat the collapse in crude prices and to cope with expectations of a 20% to 30% short-term decline in global oil demand. Crude prices have tumbled as much as 60% this year.

Meanwhile, Royal Dutch Shell (RDS.A) announced on Thursday that it is cutting its quarterly dividend to 16 cents per share from 47 cents and suspending share repurchases. The oil giant’s shares plunged 11% to $33.77 in midday U.S. trading.

“Shareholder returns are a fundamental part of Shell’s financial framework,” said Royal Dutch Chairman of the Board Chad Holliday. “However, given the risk of a prolonged period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand outlook, the Board believes that maintaining the current level of shareholder distributions is not prudent.”

Exxon Mobil shares slipped 1% to $47. The company is expected to report its quarterly results on May 1.

Overall, Wall Street analysts are sitting on the fence when it comes to Exxon Mobil’s stock. The consensus of analysts tells investors to Hold the stock based on 15 Hold ratings, 3 Sell ratings and 1 Buy rating. So it is not surprising that the $48 average price target implies a mere 2.5% upside potential in the shares over the next year. (See Exxon Mobil’s stock analysis on TipRanks).

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