Royal Dutch Shell plc (RDS-A) is a global group of energy and petrochemical companies with more than 80,000 employees in more than 70 countries. The company’s operations consist of upstream and downstream services that reach more than 30 million customers per day across 46,000 retail service stations.
The company generated 36% of its revenue from Asia, Oceania and Africa, 28% of its revenue came from the United States, 28% of its revenue from Europe and 8% from the Americas outside of the United States in 2020. In terms of product categories, the company generated most of its revenue from oil production, followed by integrated gas and upstream products.
Weak Q1 Financial Results
Royal Dutch Shell reported first-quarter revenue that fell by 7.3% to $55.67 billion, missing consensus estimates by $6.51 billion, with non-GAAP earnings of 42 cents per share, beating consensus estimates by five cents. In addition, the company reduced net debt by more than $4 billion on its way to the $65 billion milestone to increase shareholder distributions.
Analysts have been bullish on the stock over the past couple of months. In April, Deutsche Bank analyst James Hubbard initiated the stock with a buy rating, citing a potential 10.7% 2022 dividend yield and buyback catalysts, along with its LNG business that gives it a low carbon advantage compared to many of its competitors.
The company raised its quarterly dividend by 4.2% to $0.347 per share, which represents a 3.55% forward yield. The dividend is payable on June 21, 2021. to shareholders on record as of May 14, 2021.
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