Thursday, May 16, 2019

Oil Stock Dividends Are "Soaring" This Year -- Sources -- May 16, 2019


May 21, 2019: see examples of soaring dividends here

Original Post

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.

For an alternative view:
  • US shale boom about to go bust: Nick Cunningham
  • US shale: not a revolution, but a retirement party: Art Berman
Today, we have this story from the same group of folks: why oil stock dividends are soaring this year. The headline seems to be a bit of hyperbole based on the story itself. If examples of any of these "soaring dividends" were given, I missed them. Data points:
  • some independent US drillers are starting to increase dividends this year
  • some of these dividends had been slashed/frozen as a result of the price slump in 2015 and 2016 (the Saudi Surge or "Saudi's trillion-dollar mistake")
  • however, publicly-traded US shale companies still underperforming the market in general
  • have amassed large amounts of debt
  • having trouble raising capital through banks
"Last year, equity and bond issues by US drillers slumped to $22 billion -- the lowest level since 207, according to an analyst at The WSJ."

One, of course, could argue that the US drillers did not need to raise as much capital as in 2015 and 2016.

Just saying.

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