January Dividend Forecasts – Royal Dutch Shell, BP, BHP and Rio Tinto

UK dividend stocks

Today, I’m looking at the latest dividend forecasts for the oil majors – Royal Dutch Shell and BP, and the commodity giants – BHP and Rio Tinto.

As analysts’ dividend estimates constantly fluctuate, it pays to review them every so often.

All figures are sourced from Stockopedia.

Shell

Analysts currently expect Shell (LON: RDSB) to pay the following dividends:

2017 – $1.84 per share

2018 – $1.83 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 2,568p, those payouts equate to yields of 5.3%.

Over the last month, analysts have downgraded their 2017 dividend estimate by 0.002p and downgraded their 2018 estimate by 0.002p (negligible).

BP

Analysts currently expect BP (LON: 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 527p, those payouts equate to yields of 5.5%.

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

BHP

Analysts currently expect BHP (LON: BLT) to pay the following dividends:

2018 – $0.94 per share

2019 – $0.81 per share

At the current share price of 1,608p, those payouts equate to yields of 4.3% and 3.7%. Notice the drop from 2018 to 2019.

Over the last month, analysts have upgraded their 2018 dividend estimate by $0.044 and upgraded their 2019 estimate by $0.033. Strong dividend upgrades here.

Rio Tinto

Lastly, analysts currently expect Rio Tinto (LON: RIO) to pay the following dividends:

2017 – $2.74 per share

2018 – $2.54 per share

At the current share price of 4,078p, those payouts equate to yields of 5.0% and 4.6%. Notice the drop from 2018 to 2019.

Over the last month, analysts have upgraded their 2017 dividend estimate by $0.043 and upgraded their 2018 estimate by $0.12.

Which is the best dividend stock?

Shell remains my preferred dividend play here.

The oil major hasn’t cut its dividend since WW2, and with the oil price above $60, the chances of a dividend cut are looking much less likely.

While commodity companies can generate big capital gains when commodity prices are rising, they can also run into trouble if commodity prices collapse. This can impact their ability to pay dividends. In recent years both BHP and Rio have cut their payouts. For this reason, dividend investors need to be a little careful.  

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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