A portfolio of stocks I've been building since September 3 is named Volio. It will eventually hold 52 dividend dogs. Volio is the fifth portfolio I've built (at a one dividend dog per-week pace) since 2014. Five portfolios = V for Volio!
Today I'm reviewing the third of five energy sector stocks striving to join my Volio folio. This could be my twenty-eighth pick for Volio!
That energy sector includes six industries all related to bringing oil and gas to market. They are: drilling, exploration and production (E&P), equipment and services, integrated, midstream, refining & marketing. (Those six oily and gassy enterprises.)
My subject today is a large-cap oil and gas integrated operation named, Royal Dutch Shell PLC. Their trading ticker symbol is RDS-A. This is my first report about Royal Dutch Shell PLC.
Royal Dutch Shell is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2018, it produced 1.9 million barrels of liquids and 11.2 billion cubic feet of natural gas per day. At year-end 2018, reserves stood at 11.4 billion barrels of oil equivalent (including 1.3 billion for equity companies), 37% of which consisted of liquids. Its production and reserves are in Europe, Asia, Oceania, Africa, and North and South America. The company operates refineries with capacity of 2.9 mmbd located in the Americas, Asia, Africa, and Europe and sells 18 mtpa of chemicals. Its largest chemical plants, often integrated with its local refineries, are in Central Europe, China, Singapore, and North America.
Royal Dutch Shell plc was founded in 1907 and is headquartered in The Hague, the Netherlands.
I use three key data points to gauge dividend equities or funds like Royal Dutch Shell PLC:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest, or not.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
RDS.A Price
Shell's price per share closed at $46.05 yesterday. A year ago its price was $62.48. So, in the past year, its market price fell $16.43, or 26.3%.
Assuming Shell's stock trades in the range of $42 to $66 this next year, its recent $46.05 price could rise by $13.95 to reach $60.00 by February 26, 2021, assuming upward price momentum returns.
RDS.A Dividends
Shell's latest declared quarterly dividend was $0.94 payable March 23. That $0.94 Q dividend equates to an annual payout of $3.76 and yields 8.17% at yesterday's $46.05 share price.
RDS.A Gains?
Adding the $3.76 annual estimated dividend to my $13.95 estimate of Royal Dutch Shell PLC price upside shows a $17.71 potential gross gain, per share, which will be reduced by any costs to trade those shares.
Say we put a little over $1,000.00 today in Royal Dutch Shell PLC at its recent $46.05 price, would buy 22 shares of RDS.A.
A $10 broker fee paid half at purchase and half at sale could cost us $0.45 per share.
Subtract that $0.45 brokerage cost from the estimated $17.71 gross estimated gain per share leaves a net gain of $17.26 X 22 shares = $379.72 or a 37.9% net gain on a $1,013.10 investment.
Therefore, Royal Dutch Shell PLC, whose trading ticker symbol is RDS.A shows a possible 37.9% net gain including an 8.17% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Royal Dutch Shell PLC, is worth your time and money.
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