Oil Stock Dividend Safety


Lately, I’ve been reviewing the relationship between dividends and earnings (as well as cash flow) among five of the six energy supermajors on the planet: ExxonMobil, Chevron, BP, Royal Dutch Shell, and ConocoPhillips.

And I was struck by one fact in particular: the dividends at all five companies consumed less than 40% of the cash flow per share (note: I normalized the figures at BP to adjust for the asset shedding in response to the potential litigation risk). Considering that Exxon paid out 76.7% of its cash flow as dividends in 1968, this is marked shift in the general strategy of the oil supermajors over the past several decades.

Nowadays, oil companies have Read the rest of this article!