Royal Dutch Shell (NYSE: RDS-A) is the second biggest oil and natural gas company in the world, behind only ExxonMobil (NYSE: XOM). However, in a manner unlike Big Oil entities such as ExxonMobil and Chevron (NYSE: CVX), Royal Dutch Shell is getting smaller. It is selling off assets to focus on its most profitable operations.
That makes Royal Dutch Shell even more appealing to long term investors.
This has certainly been the reaction of Wall Street. Royal Dutch Shell is up for the last quarter, six months, and year of market action. For 2014, Royal Dutch Shell has risen by over 14 percent. That easily tops the performance of ExxonMobil.
The dividend yield of Royal Dutch Shell tops that of Chevron and ExxonMobil, too.
ExxonMobil has a dividend yield of 2.85 percent. The dividend yield for Chevron is 3.44 percent. For Royal Dutch Shell, the dividend yield is 3.72 percent. Income investors should be pleased that Royal Dutch Shell is committed to increase the amount of the dividend. As a result, long term shareholders will get a raise simply for not selling when the dividend amount is raised.
Big Oil has a very bullish future.
The demand for oil and natural gas will only increase. In addition, oil is becoming much more attractive as a safe haven asset for investors. The investment community realizes the overall appeal of oil and is moving more into the commodity as a safe haven holding.
This is shown by the low short float on Royal Dutch Shell.
Even with its rally for the year, few are willing the bet that Royal Dutch Shell will fall. The short float is 0.08 percent. A short float of 5 percent is considered to be troubling for a company. But the corporate strategy of Royal Dutch Shell is working in that Wall Street is taking the price higher, with few willing to put money down that the share price will fall.