Dividends

Shell’s dividend surrender is a necessary evil

30 April 2020

Given it hadn’t reduced shareholder payouts since WW2, the Anglo-Dutch major’s two-thirds cut hurts its pride. But amid an epic price crash boss Ben van Beurden couldn’t have kept Shell’s rating and paid to transition from oil. Stubbornly clinging on would have been even worse.

BP’s dividend sangfroid may not last long

28 April 2020

The oil giant held its payout steady in the first quarter, despite crude prices falling off a cliff. CEO Bernard Looney has enough cash to keep it up this year. But debt has spiked and oil is now even cheaper. At the very least BP should let investors take dividends in shares.

Norway shines awkward light on Big Oil dividends

23 April 2020

Oslo’s state-owned $42 bln Equinor is slashing its first-quarter payout by 67% after oil prices turned negative this week. Bigger peers like Royal Dutch Shell really won’t want to follow suit and have some leeway not to. But a live example of caution makes it harder to hold firm.

FCA’s big dividend ambitions bruised by pandemic

15 April 2020

Plummeting auto sales triggered by the Covid-19 crisis and idle plants expose carmakers’ acute need for cash. Tapping state aid would alleviate Fiat’s pandemic pain. But that would probably require delaying or reconsidering payouts to cement a planned union with France’s Peugeot.

UBS sets high-water mark for 2020 bank earnings

9 April 2020

Outgoing CEO Sergio Ermotti unveiled a one-third jump in first-quarter profit. Market volatility has boosted trading income, while wealth clients shifted more money around. Yet both are temporary. With more pain to come, it makes sense to bow to regulators by trimming dividends.

Investors can live without U.S. bank dividends

7 April 2020

Only a months-long severe crisis would make JPMorgan consider cutting quarterly payouts. It’s similar for many U.S. lenders, which are well padded and don’t pay big dividends. Yet that makes turning off the tap a fairly painless way to wean investors off an illogical fixation.

Jamie Dimon sets virus playbook benchmark

6 April 2020

Covid-19 has prompted JPMorgan’s boss to pen his most useful letter to shareholders in 14 years atop the $275 bln bank. He is talking his book, especially on regulation, but Dimon has laid out what customers, investors, employees, and even voters, have a right to expect.

Viewsroom: Lingering lockdowns

2 April 2020

Breakingviews journalists around the globe check in with Editor Rob Cox to discuss Silicon Valley’s response to the coronavirus, how European regulators are forcing banks to hoard dividends, and one of the biggest corporate rescues yet of the crisis: Singapore Airlines.

Big Oil might be a weird stock market haven

2 April 2020

Shares in the world’s big five listed crude producers are down by over a third since January. Yet despite the global oil slump, their dividends look secure for now. Rock-bottom prices would have to last well into 2021 for credit ratings or payouts to be in serious doubt.

Insurers are next in line for virus dividend chop

2 April 2020

Regulators told the likes of Allianz and Aviva to think twice about giving cash to shareholders. Most payouts look safe even after steep market falls. Yet bond downgrades loom, and pressure to help the economy will sap profitability. Unlike banks, cuts may not fall evenly.

Corona Capital: Rich vs. poor, Carnival

31 March 2020

Concise views on the pandemic’s corporate and financial fallout: The rich may save even more while the coronavirus rages while the poor will be further squeezed, and Carnival tries to bail out its sinking cruise business with a big sale of equity and debt.

Global dividend drought could rival 2009

30 March 2020

Companies like Ford, H&M and UniCredit have cancelled payouts. Government curbs and the need to conserve cash mean more will follow. Distributions had more than doubled since the last crisis-induced drop. Pension funds and other income investors will feel the lack of cash flow.

EU bank dividend pause could add $300 bln to loans

30 March 2020

Lenders like UniCredit and ING will follow regulators’ advice and halt payouts. That could add $30 bln to euro zone bank capital, supporting 10 times that sum in lending to virus-hit firms. Those who stick with their dividends, like UBS, will regret it if the crisis persists.

Scrap bank dividends to help save the world

24 March 2020

Spain’s $39 bln Santander may pause 2020 payouts, freeing up capital to support lending amid the pandemic. A more radical move would be for banks to all cut 2019 dividends. Investors need cash less than virus-hit firms, and U.S. and European share prices already factor in a hit.

Corona Capital: Religious aid, Ad-spending slump

23 March 2020

Concise views on the pandemic’s corporate and financial fallout: U.S. Vice President Mike Pence wants Americans to donate to religious institutions to bolster community aid. But churches have their own fiscal problems. Plus: TV ad revenue look set for a pounding.

Occidental divi cut puts Buffett in driver’s seat

10 March 2020

The oil driller slashed its payout in response to crude prices plummeting. That is the last straw for CEO Vicki Hollub, who staked her credibility on a debt-fuelled purchase of Anadarko. Oxy now looks like an appealing M&A morsel, though all hangs on kingmaker Warren Buffett.

Virus only strengthens Peugeot merger logic

26 February 2020

The $17 bln French automaker warned of lower sales growth and margins. The effect of the coronavirus will be a further blow. Still, combining with Fiat Chrysler should lead to a more profitable and resilient group. Investors aren’t giving boss Carlos Tavares enough credit for it.

Daimler’s dividend reverse may be just the start

11 February 2020

The Mercedes maker slashed its payout by 2.5 bln euros after 2019 earnings fell by nearly two-thirds. It’s a painful but necessary step to conserve cash while investing in electric vehicles. If projections of stable sales prove too rosy, CEO Ola Kaellenius may need to cut deeper.

Intesa will cope with weak economy test

4 February 2020

The $45 bln Italian bank reported healthy net profit for the fourth quarter. Its rich valuation means investors already reward CEO Carlo Messina’s focus on fees and big dividends. At least proceeds from a big sale provide a buffer against economic fragility in its home market.

Boeing needs MAX insurance more than a dividend

22 January 2020

The $175 bln aircraft giant’s new CEO, David Calhoun, says he won’t cut its $4.6 bln a year dividend. Yet Boeing will burn cash as long as the 737 MAX remains grounded. Borrowing more can paper over problems, but cutting the payout would be prudent in case of further delays.