Oil Dividends Survive... as industry struggles to breathe

Nov 2015
278
179
Alpine, NJ
#1
Despite the steady decline in oil prices, the "oil majors" have continued to maintain dividends.

Based on Friday's closing price, Shell payed out 6% per share to investors. Owning 1,000 shares would have made $1,410 in dividends this year.

Earnings shrank this year, and many companies have ditched exploration and drilling projects. Some companies also launched divestment programs. Analysts say the dividends will keep some investors for a while, but ultimately oil majors will need find solutions to increase the bottom line.

Oil Majors? Dividends Survive Plunge in Oil Prices - WSJ
 
Dec 2014
27,184
14,910
Memphis, Tn.
#2
Despite the steady decline in oil prices, the "oil majors" have continued to maintain dividends.

Based on Friday's closing price, Shell payed out 6% per share to investors. Owning 1,000 shares would have made $1,410 in dividends this year.

Earnings shrank this year, and many companies have ditched exploration and drilling projects. Some companies also launched divestment programs. Analysts say the dividends will keep some investors for a while, but ultimately oil majors will need find solutions to increase the bottom line.

Oil Majors? Dividends Survive Plunge in Oil Prices - WSJ
Yeah, maybe some investors are not too happy. But we ordinary consumers need to look on the bright side.
Remember back in the late summer of 2008 when gasoline and diesel prices were as much as $5.00/gal.?
And prices of many things, especially food increased dramatically. Remember how we were told it was unavoidable as pretty much all products had to shipped somehow and expensive fuel consumed and many products were had to use fossil fuels like oil in their manufacture? Food was especially vulnerable, as it not only had to be shipped from the fields but farmers had to have fuel for their tractors and trucks, and oil was even a vital component is fertilizer, herbicides and pesticides needed to grow it.

Well, happy days are here again!!! Given oil prices are cheaper than dirt "the market" is passing along it's savings to the poor consumer and all those prices have gone down!!

Oh wait, those price decreases never actually happened. Never mind....my bad.
 
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Likes: 1 person
Dec 2014
27,184
14,910
Memphis, Tn.
#4
It's simple enough in business. If you raise your prices, no matter what the reason you give, and enough people pay the increased price to make up for any loss due to the people that won't pay the increased price why in the hell would you lower your prices when the "reason" you gave publically for that increase ceases to exist?
It's especially easy to do that when your product or service is a necessity, like food or health care, etc.
 
Dec 2014
27,184
14,910
Memphis, Tn.
#5
It's simple enough in business. If you raise your prices, no matter what the reason you give, and enough people pay the increased price to make up for any loss due to the people that won't pay the increased price why in the hell would you lower your prices when the "reason" you gave publically for that increase ceases to exist?
It's especially easy to do that when your product or service is a necessity, like food or health care, etc.
Well? Anyone at all NOT agree with this comment???
 
Dec 2006
26,653
11,795
New Haven, CT
#6
I have no problem AT ALL with the oil companies making profits - they ARE businesses, after all.

I just have problems with them getting government hand-outs, having huge tax loopholes, destroying the environment, price gauging so that the pump price of oil is outrageously high. THOSE are things I have problems with.

If they can charge a reasonable price for their produce and make a profit - it makes them good businessmen - and good people IMO.
 
Apr 2013
38,049
26,062
La La Land North
#7
Yeah, maybe some investors are not too happy. But we ordinary consumers need to look on the bright side.
Remember back in the late summer of 2008 when gasoline and diesel prices were as much as $5.00/gal.?
And prices of many things, especially food increased dramatically. Remember how we were told it was unavoidable as pretty much all products had to shipped somehow and expensive fuel consumed and many products were had to use fossil fuels like oil in their manufacture? Food was especially vulnerable, as it not only had to be shipped from the fields but farmers had to have fuel for their tractors and trucks, and oil was even a vital component is fertilizer, herbicides and pesticides needed to grow it.

Well, happy days are here again!!! Given oil prices are cheaper than dirt "the market" is passing along it's savings to the poor consumer and all those prices have gone down!!

Oh wait, those price decreases never actually happened. Never mind....my bad.
Not really. And food prices were affected by California drought recently, more than oil price. For example, look at: