December dividend forecasts – Shell, BP, BHP, Rio Tinto

Dividend forecast Shell BP BHP Rio

Today, I’m examining dividend forecasts for the oil majors and the commodity giants.

Let’s take a look at the latest dividend forecasts for Royal Dutch Shell, BP, BHP and Rio Tinto. All figures are sourced from Stockopedia.

Shell

Analysts currently expect Shell to pay the following dividends:

2017 – $1.84 per share
2018 – $1.84 per share

It’s worth noting that those estimates are a decrease from last year’s payout of $1.88. However, with the oil price having risen recently, I don’t believe Shell will cut its dividend.

At the current share price of 2,400p, those payouts equate to yields of 5.7%.

In the last month, analysts have upgraded their 2017 dividend estimate by 0.009p and upgraded their 2018 estimate by 0.008p (negligible).

BP

Analysts currently expect BP to pay the following dividends:

2017 – $0.39 per share
2018 – $0.39 per share

It’s worth noting that those estimates are a decrease from last year’s payout of $0.40. However, with the oil price having risen recently, I don’t believe BP will cut its dividend either.

At the current share price of 490p, those payouts equate to yields of 5.9%.

In the last month, analysts have held both their 2017 and 2018 estimates flat.

BHP

Analysts currently expect BHP to pay the following dividends:

2018 – $0.89 per share
2019 – $0.78 per share

At the current share price of 1,345p, those payouts equate to yields of 4.9% and 4.3%. Notice the drop from 2018 to 2019. 

In the last month, analysts have upgraded their 2018 dividend estimate by $0.025 and upgraded their 2019 estimate by $0.022.

Rio Tinto

Lastly, analysts currently expect Rio Tinto to pay the following dividends:

2017 – $2.70 per share
2018 – $2.43 per share

At the current share price of 3,470p, those payouts equate to yields of 5.8% and 5.2%. Notice the drop from 2018 to 2019. 

In the last month, analysts have downgraded their 2017 dividend estimate by $0.018 and upgraded their 2018 estimate by $0.076.

Which is the best dividend stock?

For me, the pick of the bunch amongst those four stocks would have to be Shell. The oil major hasn’t cut its dividend since WW2, and with the oil price back around $60, the chances of a dividend cut are looking much less likely.

The thing about the commodity companies is that their revenues and profitability can be extremely volatile. This isn’t good from a dividend investing perspective, as it means these companies can struggle to pay dividends at times. In recent years both BHP and Rio have cut their payouts. While both companies have the potential to generate capital growth if you buy shares at the right time in the commodities cycle, as dividend stocks, they’re not ideal, in my view.

Disclosure: Edward Sheldon, CFA owns shares in Royal Dutch Shell. 

This article is provided for general information only and is not intended to be investment advice. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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