36.50 +0.26 (0.72%)
Pre-market: 5:41AM EDT
|Bid||36.66 x 900|
|Ask||0.00 x 900|
|Day's range||35.56 - 37.86|
|52-week range||21.26 - 66.48|
|Beta (5Y monthly)||0.93|
|PE ratio (TTM)||9.29|
|Forward dividend & yield||3.76 (9.65%)|
|Ex-dividend date||12 Feb 2020|
|1y target est||50.67|
As prices crashed, the supermajors resorted to one of the last tools they have before starting to potentially consider the painful idea of cutting dividends, taking on more debt
Last year’s oil and gas merger mania seems to have stopped in its tracks as crashing oil prices and the coronavirus crisis weighs on the industry
Russia gas giant Gazprom has run into yet another hangup in its ambitious Baltic LNG project, leaving shareholders wondering if the project will ever be completed
The Shell share price currently supports a dividend yield of 10%, and it looks as if this distribution is here to stay for the foreseeable future. The post I think it could be time to buy the Shell share price's 10% dividend yield appeared first on The Motley Fool UK.
UK's FTSE 100 fell on Friday as oil stocks retreated after a strong showing in the previous session, while insurers tumbled after their European Union counterparts were asked to suspend dividend payments to weather the economic hit from the coronavirus crisis. Shares in BP and Royal Dutch Shell fell about 3%, with oil prices flat amid doubts over whether a deal to call off the Saudi-Russian price war would go ahead if the U.S. does not scale back output. After Thursday's numbers showed another record surge in U.S. weekly jobless claims, investors are now waiting for data on European services sector activity for March.
(Bloomberg) -- Investors are finally warming up to the high-yield market, piling into a handful of new deals and propelling inflows to a record high.Junk bond funds took in $7.09 billion for the week ended April 1, according to Refinitiv Lipper, setting a new weekly record. The cash influx comes on top of three new high-yield offerings Thursday, opened up by the success of deals from Carnival Corp. and YUM! Brands Inc. earlier this week.Issuers are seeing a resurgence in risk appetite, as massive demand for new bond sales has allowed companies to go bigger and bolder with their debt offerings. T-Mobile US Inc. is issuing $19 billion of secured investment-grade bonds in the year’s second-largest sale, while Tenet Healthcare Corp. and TransDigm Group Inc. were able to boost the size of their high-yield offerings.Investment-grade issuance in the U.S. set a new weekly record, with T-Mobile and Oracle Corp. pushing supply to $110.9 billion through Thursday, edging past last week’s total. Issuers came forward with strong reception despite a record high number of U.S. jobless claims, on top of 17 new deals in Europe.Credit investors’ desire for European corporate debt showed no sign of easing as they threw more than 70 billion euros ($76.5 billion) toward new European bond offerings in just one day. Among the big ones today were oil majors BP Plc and Royal Dutch Shell Plc, taking advantage of rising oil prices after China said it would boost its reserves.“Primary market activity has resumed with a vengeance,” said Wolfgang Bauer, a fund manager at M&G Plc. “It’s fair to say that market functionality in the European investment-grade market, particularly on the primary market side, has noticeably improved over the past week.”U.S.T-Mobile was by far the largest deal on the docket today, and the second-largest this year coming behind Oracle. Investment-grade issuance reached $32.1 billion Thursday.Tenet, TransDigm and Restaurant Brands are bringing high-yield offerings, following YUM! Brands which reopened that market MondayCarnival, though technically investment-grade rated, was run off the high-yield syndicate desks and was able to boost the size and cut the coupon WednesdayFor deal updates, click here for the New Issue MonitorFunds that invest in high-yield corporate debt saw investors add $7.09 billion for the week ended Wednesday, according to Refinitiv Lipper data. Investment-grade funds saw continued outflows as $8.47 billion was withdrawn Boeing is offering buyouts to its entire staff of 161,000 people and weighing new output reductionsPimco sees opportunities in bonds issued by high-quality companies in the utility, power, health care, cable and telecom sectors, according to Mark Kiesel, the firm’s chief investment officer for global creditBankrupt shale driller Alta Mesa Resources has a tentative deal to sell itself for $220 million, down from $320 million before the buyer demanded a discount because of the coronavirus pandemicBanks that agreed to help finance leveraged buyouts are starting to feel the pain from a freeze in the market for risky corporate debtEuropeOil giants BP Plc, Royal Dutch Shell Plc and OMV AG all offered euro notes Thursday, capitalizing on a boost in oil prices after China moved forward with plans to bolster its reserves.Lloyds Bank Corporate Markets Plc and British American Tobacco Plc rounded out a total of 17 issuers that sold EU25.46bRampant demand has allowed companies to chop pricing on their bonds, with Schneider Electric SE pulling in a staggering 8.8 billion euros of orders for a 500 million-euro seven-year noteMore triple-B rated companies dove into the market, including LafargeHolcim“While last week the focus had still been firmly on issuers at the higher end of the investment-grade quality spectrum, this week BBB-rated issuers have joined the new issue pipeline,” said M&G’s BauerCorporate bond spreads continue to ease from the highest levels since 2012, falling 3 basis points to 239 basis points on WednesdayDefault-swaps insuring the highest-rated corporate debt remain elevated at about 105 basis points. Nonetheless, this compares to a peak of about 138 basis points reached last month, according to a Bloomberg Barclays indexBanks may ask authorities to advise against calls on some instruments if the economy deteriorates further, Jakub Lichwa, a strategist at Royal Bank of Canada, wrote in a noteAsiaThursday was a down day for credit in Asia. Yield premiums on Asian dollar bonds and the cost of insuring debt against default in the region both increased, as more dour news on the coronavirus pandemic limited risk-taking. Read more about that here.Spreads on top-rated Asian dollar bonds were around 10 basis points wider Thursday, according to traders, after rising 3 basis points Wednesday. They are headed for a seventh straight week of increases, the longest such streak in more than a year, according to a Bloomberg Barclays indexThe Markit iTraxx Asia ex-Japan index of credit-default swaps rose about 5-8 basis points on Thursday, according traders. The gauge widened 13 on Wednesday, according to CMA dataChinese investment-grade dollar bonds may continue to outperform other emerging-market peers, says Todd Schubert, head of fixed-income research at Bank of Singapore Ltd. Better-rated Chinese notes are often government related and seem to be considered a safe haven in emerging economies, he saysSouth Korea’s 20 trillion won ($16 billion) bond stabilization fund started buying corporate notes and commercial paper from today, the Financial Services Commission said. The regulator believes the fund will act as a safety net for the marketA sale of asset-backed securities by Korean Air Lines Co. showed carriers pummeled by the coronavirus outbreak can still issue debt, though at a steep cost. Here’s a chart showing the tumble in the airline’s dollar notes:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The world's top oil and gas companies are rushing to raise tens of billion of dollars in debt to help them weather one of the worst downturns in the sector's history while faced with high fixed costs and looming dividend payments. Royal Dutch Shell , BP , France's Total , Norway's Equinor and Austria's OMV have all tapped bond markets this week, raising more than $10 billion according to Reuters calculations. Oil prices sank 65% in the first three months of the year to lows of $22 a barrel as strict movement restrictions imposed around the world to limit the spread of the coronavirus led to a collapse in demand for transportation fuels, while a fight for market share between top producers Saudi Arabia and Russia accelerated price falls.
(Bloomberg Opinion) -- With $250 billion of new U.S. bond issues at investment grade since the middle of March, and 150 billion euros ($164 billion) in Europe, the high-end credit market is an undoubted beneficiary of the central banks’ coronavirus stimulus plans. The debt capital market is definitely back open.Indeed, analysts at Goldman Sachs Group Inc. have bravely ventured that the worst of the widening of credit spreads — where the yield on corporate debt starts to increase faster than that of benchmark bonds — may be over for high-grade issuers.As I’ve written before, it’s important not to see this as a sign that all is well in the entirety of the credit markets: Companies with non-investment grade paper are crucial to the real economy too, but junk bonds are a long way from being in a good place. Defaults are looming.Setting aside the broader economic concerns of this state of affairs, there will be opportunities for investors in finding companies that will emerge from the crisis stronger — or the ones that will get most state support, if you’d prefer to be cynical. Credit selection, akin to stock-picking, will be the answer for those hunting yield. Tread carefully among the rubble and you might find some sparklers.As the Goldman analysts say, the high-grade part of the market is functioning well. There are 16 new issues slated in the euro debt capital markets on Thursday, including bonds from corporate giants such as BP Plc, British American Tobacco Plc and Royal Dutch Shell Plc. There’s even a rare deal coming in sterling, a market that’s been largely shut, from carmaker Volkswagen AG. That will be a significant test for a sector that’s been effectively shutdown by Covid-19.Credit spreads blew out spectacularly in March, and while things have improved, the environment has changed profoundly — even for the higher quality stuff. The premium offered on yields for new issues and overall credit spreads are significantly wider than during the first two months of this year, before the coronavirus struck the West in earnest. For corporate issuers, the heady days of rock-bottom interest rates are over, but this is better news for investors. The potential for positive performance is phenomenal, explaining why so many are diving back in to try to outperform the index. The European Central Bank has 1 trillion euros of bond purchases to complete this year, with as much as 20% of that to steer into eligible investment grade companies. That will be a major tailwind for a spike in the value of corporate debt.The ECB excludes financial firms and junk bonds from its Quantitative Easing program, but the crowded demand for high-quality paper will no doubt steer people toward non-investment grade sales, helping issuers. Also, whisper it, but the eligibility criteria for QE might well be softened.High-yield is still suffering badly from blown-out credit spreads. But it can offer the biggest opportunities to investors, especially if the particular company is critical to any economic recovery. Government credit and bailout plans might add to the appeal of certain sectors such as infrastructure, health and utilities. Less vital industries in the junk bond space will have to pay up to attract buyers. The beleaguered cruise liner company Carnival Corp had to pay a whopping 11.5% coupon to raise $4 billion this week. To get a sense of how far things have gone south for Carnival, at the beginning of March the yield on its existing three-year dollar bond had slipped below 2%. Bank debt might be popular too. Lenders’ senior investment-grade paper is already practically backstopped by national central banks. Subordinated bank debt remains for the brave, albeit the riskiest additional tier-1 perpetuals (known as CoCos, where investors lose out if a company goes bust) will always have their fans among those clamoring for proper yield. Selecting which companies can weather a crisis versus the dead ducks has probably been the most overlooked financial skill-set since the Lehman Brothers crisis, especially in corporate bonds. Blanket QE and the remorseless rise of passive investing has masked what active managers should be best at. It will pay in future to invest in a more selective fashion rather than simply buying the index.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
World stocks were mixed on Thursday, as the death toll from coronavirus rose and economic pain deepened, with another record week of jobless claims expected in the United States. Oil futures surged after U.S. President Donald Trump said he expected Saudi Arabia and Russia to reach a deal soon to end their oil price war.
(Bloomberg) -- Royal Dutch Shell Plc, Total SA and Equinor ASA are selling $12 billion of bonds as the combined effect of the slump in oil prices and the collapse in demand threaten to sap cash flows for months.Big Oil, already under pressure from shareholders before the coronavirus crisis to improve returns, has moved swiftly to defer projects, cut spending and halt share buybacks. They are seeking to protect dividends as the economic slump and a price war led by Saudi Arabia undermines profits.Anglo-Dutch oil giant Shell is selling $3.75 billion of bonds while its French peer Total is tapping the market with 3 billion euros ($3.3 billion) of debt. Equinor sold $5 billion of notes maturing between 2025 and 2050, the Norwegian company said Wednesday in a statement.“In combination with our $3 billion action plan to reduce cost, this transaction will further strengthen our financial resilience and flexibility going forward, and ensure liquidity to prioritized projects,” Equinor Chief Financial Officer Lars Christian Bacher said in the statement.Oil Majors Hold Onto Their Dividends. For Now: Taking StockShell already signed a $12 billion credit line at the end of March, one of its biggest single facilities, giving it more room to weather the crisis room after its credit outlook was downgraded.The healthiest crude producers have signaled they’ll use their strong balance sheets to take on more debt during the crisis as cost cuts won’t suffice to plug the cash shortfall. That’s prompting some analysts and investors to question if they can continue to maintain their payouts if the crisis persists.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Oil company executives reeling from a massive drop in prices were set to meet with President Donald Trump Friday as the administration seeks ways to help the beleaguered industry.The meeting, which was confirmed by the American Petroleum Institute, comes just as Saudi Arabia unleashes a record volume of crude into the already-glutted global oil market, escalating a price war with Russia. Trump, who once hailed the unprecedented plunge in oil prices as a “tax cut” for American consumers, has stepped up efforts in recent days to intervene as the rout threatens to wipe out tens of thousands of jobs in America’s shale patch.“We don’t want to lose our great oil companies,” Trump said Wednesday during a briefing at the White House.The president said he expects the two countries to settle their differences. He also said he’s planning to meet with independent oil producers in addition to the majors.“They’re negotiating, they’re talking, and I think they’ll come up with something,” Trump said. “I do believe there’s a way that that can be solved or pretty well solved.”Executives from companies such as Exxon Mobil Corp., Chevron Corp., Occidental Petroleum Corp. and Continental Resources Inc. are expected to attend, according to people familiar with the meeting who asked not to be named to discuss non-public matters.Among the topics expected to be discussed are possible tariffs on oil imports into the U.S. from Saudi Arabia, and relief from the Jones Act that requires ships that transport goods between U.S. ports to be American-flagged, according to one of the people familiar.Attendees represent companies across the oil industry, including independent producers such as Continental and Devon Energy Corp., at least one midstream pipeline operator, Energy Transfer Partners, and one refiner, Phillips 66, according to another person familiar with the meeting. Representatives of the American Petroleum Institute are also attending the meeting.No independent offshore oil producers were invited to the summit. And no European oil majors, even those with substantial U.S. operations are invited, so Royal Dutch Shell Plc, BP Plc, Equinor ASA and others are left out.The companies have advanced widely varying prescriptions for dealing with the glut of crude fed by the Russia-Saudi oil price war and collapsing demand from the coronavirus.Oil majors such as Exxon and Chevron for instance have typically opposed any kind of government intervention in crude markets including tariffs and mandated production cuts. With better access to capital and diversification of businesses, they’re more resilient than smaller operators to ride out the rout.But some U.S. independent explorers, whose tenacity and technological innovation began the shale oil revolution, argue that such low crude prices risk killing America’s domestic industry, leaving the country dependent on foreign producers once again.Continental Resources Chairman Harold Hamm has urged the U.S. to impose tariffs on Saudi and Russian crude, while several oil industry trade groups and refiners have warned against that step. The American Exploration and Production Council previously floated the Jones Act waiver.In a joint letter to Trump, the heads of the American Petroleum Institute and American Fuel and Petrochemical Manufacturers urged the president not to take any action that would restrict crude imports. “Imposing supply constraints, such as quotas, tariffs, or bans on foreign crude oil would exacerbate this already difficult situation,” they wrote.Texas Railroad Commissioner Ryan Sitton, one of three regulators in the largest oil-producing state, says Trump should offer that the U.S. cut production at home for matching reductions from Saudi Arabia and Russia.(Updates with joint industry letter in 14th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
As the Lloyds Bank share price plummets further in response to its dividend cut, I don't think Shell will go the same way, even as the oil price slides. The post Forget the Lloyds Bank share price! Royal Dutch Shell dividends look safer to me appeared first on The Motley Fool UK.
As the world fights a pandemic, top energy companies will have to reassess their payout strategies, either by slowing down share buybacks or reintroducing non-cash dividends.
US crude oil prices fell close to their lowest in 18 years on Monday! Is this bad news for the FTSE 100 oil companies?The post Oil prices crash! Should you invest in BP or Royal Dutch Shell shares in this market crash? appeared first on The Motley Fool UK.
(Bloomberg) -- Oil majors and traders are scrambling to book supertankers to try and divert a flood of American crude to Asia, betting the region is the best place to store the surplus while the market waits for a rebound.A dozen very large crude carriers are being sought to load from the U.S. Gulf Coast over a 10-day period from late-April to early-May, according to shipowners and brokers, as well as tanker fixtures seen by Bloomberg. That compares with nine supertankers being chartered on the route in a 25-day loading period starting early-April, data from Vortexa showed.BP Plc, Royal Dutch Shell Plc and Vitol SA are among companies inquiring about or booking tankers to move U.S. crude to Asia, the biggest-consuming region, the fixtures showed. Not all of the oil -- which could amount to as much as 24 million barrels if all the charters are confirmed -- has been committed to end-users, traders said.A glut of crude in the U.S. that’s been exacerbated by the White House failing to win funding from Congress to top up the nation’s emergency stockpiles is making the long-haul arbitrage more attractive. West Texas Intermediate is moving deeper into contango, a market structure where prompt supplies are cheaper than delayed shipments, which also makes the trade more economic.BP, Shell and Vitol all declined to comment on the matter.The arbitrage window is at risk of quickly closing, however, should freight costs become prohibitively high. The VLCCs, which can carry 2 million barrels, were provisionally chartered at between $11 million to $15 million each, the fixtures showed. That compares with around $6.5 million in late-February.The cost to transport oil from U.S. Gulf Coast to Ningbo in China, also known as the TD22 route, on a very large crude carrier jumped to more than $17 million as of March 30, according to two shipbrokers.Slow-Steam StrategyThe tankers provisionally booked to send crude to China, Singapore and South Korea include Agios Sostis I, C. Prosperity and Amjad, the fixtures showed. The vessels may reduce their speeds during the voyage, which usually takes around 60 days, said traders who regularly work the trade. The strategy known as slow-steam resembles a floating-storage play in which participants hope to benefit from a rebound in prices, they said.Upon the shipments’ arrival, some cargoes may find their way to the Chinese refining sector, where private and state-owned processors are ramping up operations. Refiners in Asia’s largest economy are expected to increase processing rates to over 12 million barrels a day this week, according to senior officials at China’s top processors.Some oil shipped to Asia may be placed in onshore storage facilities as Indian, South Korean and Singaporean refiners opt to cut run rates to cope with falling domestic fuel consumption.(Updates with details on latest freight costs in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.