Exxon, Chevron dividends stay flat
Dividends at Exxon and Chevron, the largest U.S. oil companies, remained flat for the first quarter, the companies said, a sign that there is still some uncertainty about oil’s recovery.
Exxon on Thursday said it will pay 87 cents per share, an amount that has remained steady since mid-2019. Chevron on Thursday said it will pay $1.29 per share, unchanged since the start of the pandemic last year. Dividends provide a window into future prospects for companies. Oil and gas companies are doing all they can to preserve dividends to help woo Wall Street investors back to the energy sector in the face of the worst oil downturn in decades. In addition to preserving dividends, companies have cut capital spending and laid off thousands of workers.
Exxon Mobil, the nation’s largest oil company, in December slashed its five-year capital spending plan to its lowest level in 15 years. The Irving-based oil giant, which employs about 12,000 in the Houston area, said capital spending won’t exceed $25 billion a year through 2025, down $10 billion from its pre-pandemic target. In October, the company said it would cut about 14,000 employees of a global workforce of 88,300 by the end of 2022.
Rival Chevron last year cut its long-term capital budget by more than a quarter to a range of $14 billion to $16 billion annually through 2025. The California oil company,
with about 10,000 Houston-area employees, said it will prioritize projects that deliver higher returns. The company laid off some 6,000 workers around the world last year.
If oil companies stray from their shareholder
commitments, it could spell more losses for their stock values, which have been pummeled after crude prices and demand plunged during the global coronavirus pandemic. Energy last year became the worst-performing sector in the U.S. stock market following years of middling performance.
Exxon, which has reliably increased its dividend for more than three decades, counts about 70 percent of its shareholders as retail investors that have come to expect the company’s regular payouts.
Chevron is scheduled to release fourth-quarter and 2020 financials Friday morning and Exxon is scheduled to unveil its results Feb. 2.