Arie Goren: Jun. 9, 2016 6:14 AM ET
Summary
- In its Tuesday, June 7, investor meeting, Shell offered a very encouraging update on the company’s strategy, which sets a clear course for stronger returns and free cash flow.
- Oil prices have shown a significant rebound in the last five months. As such, we can expect much better results for Shell’s upstream operations in the forward quarters.
- Investing in a supermajor integrated oil & gas company like Royal Dutch Shell will give investors a significant price appreciation when oil prices recover along very generous dividend yielding 7.1%.
- In my view, we can learn from the company’s new strategy that the dividend is sustainable.
Shares of Royal Dutch Shell (NYSE:RDS.A) (NYSE:RDS.B) soared in the last two days after its Chief Executive Officer Ben van Beurden provided on Tuesday, June 7, an update on the company’s strategy, that according to the company, sets a clear course for stronger returns and free cash flow. Shares of RDS.A have increased 6.43% in the last two days and shares of RDS.B have risen 6.58%.
Since the beginning of the year, RDS.A’s stock is already up 15.7% while the S&P 500 Index has increased 3.7% and the NASDAQ Composite Index has lost 0.7%. However, since the beginning of 2012, RDS.A’s stock has lost 27.5%. In this period, the S&P 500 Index has increased 68.5% and the Nasdaq Composite Index has risen 91%. read more
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