Royal Dutch Shell is Bullish: Should ...
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Dec
19
Ida Hansen
Royal Dutch Shell is Bullish: Should all Long Term Investors be Buying?
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Royal Dutch Shell (NYSE: RDS-A) is continuing to expand in areas such as Africa and the Arctic, among others, even with the falling price of oil and natural gas.

The largest oil and natural gas firm in the world, Royal Dutch Shell is “Big Oil” by every meaning.

But its stock price is not as big as it used to be.  Royal Dutch Shell is off for the last month, quarter, and six months of market action.  For 2014, Royal Dutch Shell has fallen by nearly 2 percent (chart below).

It is hardly alone as Chevron (NYSE: CVX), ExxonMobil (NYSE: XOM), and other Big Oil entities are down, too.

For long term investors, Big Oil companies such as Royal Dutch Shell, Chevron, ExxonMobil, and others that are moving forward will be the most rewarding.  It is not mere coincidence these are three of the biggest, too.  When the outlook for oil and natural gas is bullish again, as it will be, these will be the ones to gain the most; as they have retained a full range of operations.  Others who have spun off operations are suffering much worse due to the investment community preferring Big Oil.

Like other Big Oil firms, Royal Dutch Shell pays a big dividend.

Obviously that is appealing to income investors.  But it should retail long term investors due to the history of increasing the amount of the dividend.  That gives a raise to shareholders every time the dividend amount is raised.

At present, the dividend yield or Royal Dutch Shell is well over 4 percent.

That is more than twice as high as the average dividend yield for a member of the Standard & Poor’s 500 Index (NYSE: SPY).  Alone the dividend yield of Royal Dutch Shell is alluring.  Combined with the expected growth of the earnings, it makes the total return even more alluring long term investors!

 

 

 



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