Thursday, April 30th 2020
Royal Dutch Shell Cuts Its Dividend For The First time Since 1945
ORATS dividend feed lists Royal Dutch Shell RDS_A and RDS_B as cutting its dividend 66% the first cut since 1945 World War II
Royal Dutch Shell has cut its dividend by 66% to $0.16, the first cut since World War II, due to the impact of the coronavirus on global energy demand. The cut is a shock to dividend investors and pensioners that depended on the income, and the stock is trading down 13% in pre-market. ORATS dividend feed lists the Shell (RDS_A) amount as $0.27 and (RDS_B) $0.32 because both ADR share classes represent 2 ordinary shares and the A share has a net that reflects a 15% tax.
Royal Dutch Shell cut its dividend 66% to $0.16 from $0.47 this morning. This is the first time Shell has cut its dividend since WWII.
The stock is trading down 13% in pre-market as the dividend cut was much larger than expected. Shell is the biggest dividend in the FTSE-100 and this cut is a shock to dividend investors and pensioners that depended on the income.
"This is a difficult day but an inevitable moment," said Shell CEO Ben van Beurden that had to be taken to "protect the financial resiliency of the company".
The coronavirus has crushed global demand for energy and created much uncertainty for companies. Shell's large cut shows that no company is invulnerable.
The ORATS dividend feed that lists all US equities with options (including ETFs and ADRs) discrete dividend feed out 2.7 years, to cover the longest leap options.
ORATS lists the Shell (RDS_A) amount as $0.27 and (RDS_B) $0.32 because both ADR share classes represent 2 ordinary shares and the A share has a net that reflects a 15% tax.
From the ORATS dividend feed:
- RDS_A 2020-05-11 0.27 4
- RDS_A 2020-08-10 0.27 4
- RDS_A 2020-11-16 0.27 4
- RDS_A 2021-02-15 0.27 4
- RDS_A 2021-05-11 0.8 4
- RDS_A 2021-08-10 0.8 4
- RDS_A 2021-11-16 0.8 4
- RDS_A 2022-02-15 0.8 4
- RDS_B 2020-05-11 0.32 4
- RDS_B 2020-08-10 0.32 4
- RDS_B 2020-11-16 0.32 4
- RDS_B 2021-02-15 0.32 4
- RDS_B 2021-05-11 0.94 4
- RDS_B 2021-08-10 0.94 4
- RDS_B 2021-11-16 0.94 4
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Calculating what the options market implies for a dividend involves lining up the call and put weighted implied volatilities and getting the inputs for interest and dividends consistent.
Implied dividends have foreshadowed cuts by DIS WYNN and other firms. Using options prices to implied dividends ORATS presents a possible suspension list of companies.