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Shell will buy back at least $5 billion of shares for the second half of 2023.
Stefani Reynolds AFP via Getty Images
Oil giant
Shell
will be increasing the amount of its earnings that it spends on dividends and buybacks for shareholders. The stock was rising in premarket trading Wednesday.
In a presentation for
Shell
’s
(ticker: SHEL) Capital Markets Day on Wednesday, the biggest European oil company said it will boost distributions to 30% to 40% of cash flow, compared with current rates of 20% to 30%. At the same time, it will slightly decrease capital expenditures while keeping its production of oil and gas steady.
The moves are Chief Executive Wael Sawan’s latest effort to bring Shell’s market valuation more in line with rivals
Exxon
(XOM) and
Chevron
(CVX). Since starting the job in January, Sawan has committed to focusing on the company’s core production of fossil fuels and watered down some green energy targets for the future.
Shell’s American depositary receipts advanced 1.3% in premarket trading. The company’s London shares were up 0.5%.
Shell said that it will buy back at least $5 billion of shares for the second half of 2023. It will increase dividends by 15% from the second quarter.
The company previously had set a target of reducing its annual production of liquid fuels such as crude oil, but said Wednesday it would no longer seek annual reductions in liquids output.
Write to Brian Swint at [email protected]
Source: https://www.barrons.com/articles/shell-stock-dividend-buyback-ac3fa15a?siteid=yhoof2&yptr=yahoo