Royal Dutch Shell News: RDS.A Stock falls 12% on rare dividend

<p>Royal Dutch Shell (NYSE: RDS.A, RDS.B) sees RDS.A and RDS.B shares take a dive on Thursday following news of a rare dividend.

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According to a press release from Royal Dutch Shell, the company will pay a dividend of 16 cents per share for the first quarter of 2020. By comparison, its dividend for the first quarter of 2019 was 47 cents per share.

Royal Dutch Shell notes that the dividend is due to the new coronavirus. The impact of the pandemic on the economy is causing oil and gas companies problems. It makes sense because gasoline prices are falling with fewer people traveling due to home bookings.

Chad Holliday, chairman of Royal Dutch Shell, said this in the press release.

“Return from shareholders is a fundamental part of Shell’s financial framework. Given the risk of an extended period of economic uncertainty, weaker commodity prices, higher volatility and uncertain demand prospects, the Board considers that it is not wise to maintain the current share dividend. Following the announcement not to continue with the next part of the repurchase program, the Board has also decided to reduce the dividend for the first quarter of 2020 and restore it to 16 US cents per share. ”

Royal Dutch Shell will pay the dividend to investors in RDS.A and RSD.B shares on June 22, 2020. Shareholders must be registered as of May 15, 2020 to receive the dividend.

The RDS.A share fell 11.6% and the RDS.B share fell 12.4% as of Thursday afternoon.

At the time of writing, William White had no position in any of the above securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/04/royal-dutch-shell-news-hits-rdsa-stock/.

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