Dividend Stocks Are Back! | Reinstating & Rising From The Dividend Cuts

Wendy's increases dividend

Shell (RDS-A RDS-B): Shell is trying to be the oil engine, “that could”.  Now, they set a historic moment earlier in the year due to COVID-19, as the oil industry was shaking, essentially breaking.  The price per barrel was practically worthless in the futures market, due to a supply and storage problem.  This pushed Shell for the first time in almost a century, to cut their dividend down to $0.16 (i.e. $0.32 for the ADR), a massive 66% dividend cut!

Shell raises dividend

Now, Shell beat earnings and forecast estimates.  Due to other oil giants of Exxon Mobil (XOM) and Chevron (CVX) maintaining their dividend, I wonder if Shell investors were putting the pressure on.  Therefore, Shell increased their dividend from $0.16 (i.e. $0.32) to $1.665 (i.e. $0.3333), a 4% dividend increase.  Now that isn’t a significant increase, BUT it shows signs of confidence that their cash flow, balance sheet and process has improved!

Shell raises dividend 4%

Dividend reinstatements from abolishing the dividend

Foot Locker (FL): Footlocker completely stopped one quarter dividend payment.  After announcing incredible results and growth, we are talking a 17% sales growth year-over-year, plus having insane liquidity over their debt levels, Footlocker (FL) resumed their dividend of $0.15 per share, per quarter.

Footlocker reinstates dividend

Did consumers change their purchasing appetite to shoes/clothing vs. going out, traveling, etc..?  That appears to be the case, and I did read a few publications on the subject.

Darden Restaurants (DRI): Another dividend stock that was marching in dividend increases, year after year, had to stop their dividend as well.  9 months later, Darden came back with a dividend.  However, there is always an asterisk.  Their dividend pre-COVID-19 was $0.88 per share, per quarter.  Darden came back with a dividend, but only at $0.30 per share, per quarter.  Therefore, they are still 3x as far away from that dividend, at the moment.  Winter is coming and I wonder how business will perform when outdoor seating will be limited to the geography hit hard by winters.  Time will tell on this company.

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