Dividends

Viewsroom: European bank M&A, De-Dutching Shell

18 Nov 2021

Big lenders in the euro zone are doing deals, but not the kind investment bankers dream about. BNP Paribas is in U.S. retreat, BBVA bulks up in Turkey and KBC goes Bulgarian. Liam Proud explains. George Hay explains why the Anglo-Dutch oil major is dropping the Dutch bit.

Aviva’s next challenge is to show it can grow

12 Aug 2021

CEO Amanda Blanc is returning 4 bln pounds to investors in the British insurer after flogging assets worth more than 7 bln pounds. The knottier problem is to extract more earnings – and dividends – from a smaller, simpler business. Reduced debt leaves some room for acquisitions.

BP’s oil price boon is a mixed blessing

3 Aug 2021

Rising crude values allowed the $84 bln UK group to raise its payout and give CEO Bernard Looney more funds to pivot away from fossil fuels. But the bonanza could focus investor minds on less speedy rivals with scope to pay higher dividends, like Shell. That may hurt BP’s appeal.

Big Oil’s generosity has limited shelf life

29 Jul 2021

Royal Dutch Shell and Total will return billions of dollars to investors. High crude prices mean they can cut debt, invest in green energy and crank up payouts. Such largesse may get harder given growing pressure to cut emissions. Prudent payouts will limit future disappointment.

Rio Tinto CEO picks cash shower over kitchen sink

28 Jul 2021

Jakob Stausholm is spraying the miner’s shareholders with a hardy $9.1 bln in dividends after his first six months in the job. There’s also plenty to splash out on projects like Serbian lithium. Despite the mopping up required in ESG and beyond, the financial plumbing is sound.

Bank investors sense a blockage in dividend gusher

13 Jul 2021

UK lenders like NatWest could in theory make payouts worth up to 25% of their market value, after the Bank of England lifted a ban. Despite a recent rally, they’re not getting full credit for this. Lingering coronavirus risks and IT investment needs may explain the scepticism.

Fed gives back Wall St power over investor payouts

29 Jun 2021

JPMorgan and Goldman Sachs are among banks that raised their dividends after passing central bank stress tests. Some increased their buybacks too. With new capital requirements in place, investors can see who has what to give – but not how much will come their way.

Big Smoke offers Big Oil tips to avoid dodo status

9 Jun 2021

Fat dividends supported tobacco shares even as regulators focused on health risks. The outperformance of Philip Morris suggests investors like speedy pivots. Better still, hydrocarbon producers’ switch to green energy looks an easier ESG sell than tobacco substitutes.

Crazy metal prices inflate miners’ capex conundrum

14 May 2021

Sky-high copper and iron ore values should make the likes of Rio Tinto and BHP invest in extra supply for the green energy transition. But shareholders wary of past write-downs want dividends, not risky new projects. The higher prices climb, the starker the disconnect.

Drahi paints debt masterpiece with Sotheby’s bond

13 May 2021

The auction house owned by Patrick Drahi is raising $300 mln to fund a dividend. The tycoon may soon have recouped one-third of the cost of a 2019 acquisition by debt-funded payouts. The boom in such deals even for leveraged, cyclical businesses shows how desperate lenders are.

Total is least-bad pick for confused oil investors

29 Apr 2021

First-quarter results show the French group and rivals BP and Royal Dutch Shell rebounding from last year’s woes. Yet BP’s turn to wind and solar may be too sharp and Shell’s too relaxed. For now, Total’s balanced green ambition and fat dividend look more appealing.

Guest view: A qualified opinion on UK audit reform

28 Apr 2021

Corporate collapses like Carillion and Thomas Cook highlight flaws in accounting for capital and dividends, argues Natasha Landell-Mills of Sarasin & Partners. Proposals to restore trust in accounts fall dangerously short. The government should focus on enforcing existing laws.

Aramco’s next share offer is just as hard a sell

22 Mar 2021

The $1.9 trln Saudi oil giant’s annual results showed Covid-19 scars. If Riyadh sells more shares, Aramco’s low costs and spare capacity may be appealing to non-Saudi investors that largely sat out its 2019 IPO. But many environmental, social and governance red flags remain.

Fund stragglers offer own post-crisis value punt

9 Mar 2021

UK asset managers Standard Life Aberdeen and M&G are shaking off the pandemic, helped by better stock picking. The challenge is to keep assets and profit growing in an industry shaken by passive funds, and find new businesses. Their low valuations at least provide a cushion.

Rio can use sunny outlook to mend leaky roof

17 Feb 2021

Jakob Stausholm’s first results benefitted from soaring iron ore prices, allowing the global miner’s new CEO to hike dividends. But he has a messy situation in Mongolia to resolve, and governance issues. Better to spend time and money fixing these than on splashy new deals.

Capital Calls: Disney+, SPAC romance

12 Feb 2021

Concise views on global finance in the Covid-19 era: The entertainment giant’s streaming growth comes at a cost; blank-check companies are trashing all records in 2021.

Capital Calls: Third Point, Kraft Heinz/Hormel

11 Feb 2021

Concise views on global finance in the Covid-19 era: Dan Loeb’s hedge fund gets a good start in 2021, while Hormel Foods buys peanuts, but pays anything but.

Viewsroom: Bank dividends and Chinese rentals

17 Dec 2020

European regulators’ cautious lifting of a ban on bank dividends leaves investors in limbo, plus details of an unusually bold growth strategy from Credit Suisse. And the collapse of China’s WeWork-like apartment rental middlemen has left many young tenants homeless and in debt.

ECB fiat anoints unlikely bank dividend heroes

16 Dec 2020

The regulator capped payouts as a proportion of earnings and assets. Well-capitalised lenders with richer valuations, like Nordea and KBC, now offer tiny yields compared with minnows like Liberbank. The risk is that a slow recovery causes restrictions to last beyond September.

BoE leaves UK lenders in investor purgatory

11 Dec 2020

The supervisor will let HSBC, Lloyds and others resume dividends and share buybacks next year. But its new “guardrails” will limit the sector’s overall yield to around 2%. While the original ban made sense, lingering restrictions may further raise banks’ cost of capital.