By Michael Amon
Royal Dutch Shell PLC on Tuesday gave shareholders the option of
receiving a dividend via company stock, known as a scrip dividend,
a move that other large oil companies have made as cash dries up
during a period of low oil prices.
Shell r eported a fourth-quarter profit of more than $4 billion
but said that, after oil prices dropped by nearly 50% in 2014, it
wouldn't be able to raise its dividend of 47 cents per ordinary
from the previous quarter. Shell said the dividend price wasn't
expected to change in the first quarter of 2015.
"Shell's financial framework and priorities are unchanged," the
company said in a news release. "Scrip dividends offer shareholders
the opportunity to receive shares as an alternative to cash
dividends, and increase financial flexibility for the company in
the down-cycle."
Shell had offered scrip dividends from 2010 until the program's
cancellation in May 2014. This time, the dividend stock would be A
shares, including those issued to investors who currently hold B
shares, the company said.
Total SA also announced a scrip dividend after posting a more
than $5 billion loss for the fourth quarter of 2014.
This move won't come as a huge surprise given management did
little to rule this out and the recent steps adopted by Total...who
now offer a discounted scrip, wrote Jefferies analyst Jason Gammel
in a note that nonetheless called the move "disappointing" as it
may prove dilutive for current shareholders.
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