Exxon Corp slows quarterly dividend growth in 2 years

Bloomberg

Exxon Mobil Corp. has boosted it’s dividend every April for at least a decade, delivering more than $98 billion directly to shareholders. This year, the payout will likely rise again. The open question is by how much.
Exxon slowed quarterly dividend growth the last two years as the industry fought through the worst price rout in a generation. Now, with oil prices stuck at around $50 a barrel and with little guarantee they’ll rise by much, analysts are debating whether the company remains conservative, boosting its free cash flow, or if it will reward investors who stuck with it through the lean times.
Exxon raised its dividend 2 cents a year ago to 75 cents. “We think a dividend hike of this magnitude is at risk given the deterioration of underlying cash flows through the industry downturn,” said Chris Kettenmann, chief energy strategist at Macro Risk Advisors, in a note to clients. “No asymmetric risk looms larger in our view than dividend risk at the global oil majors.” An Exxon spokesman declined to comment.
Since topping $58 a barrel in January, the international Brent benchmark has slid about 10 percent and futures markets don’t expect the price to approach $58 territory again until 2024. While that could change if the Organization of Petroleum Exporting Countries prolongs its output cuts, the extraordinary rise of the US shale boom has tempered hopes for a large increase.
With that in mind, and given the small increase last April when Brent averaged about $43, a 4-cent dividend rise “sounds a little high,” said Brian Youngberg, an Edward Jones & Co. Analyst in St. Louis who has a hold rating on Exxon’s stock.