Exxon Becomes World’s Largest Dividend Payer With 21% Increase
Exxon Mobil Corp. (XOM) increased its quarterly distribution to shareholders by 21 percent as oil prices remain above $100 a barrel, making the energy company the world’s biggest dividend payer.
Exxon, based in Irving, Texas, boosted its quarterly dividend to 57 cents a share from 47 cents, according to a statement yesterday. That means the company will pay $10.7 billion a year to shareholders, more than any other corporation, according to Howard Silverblatt, senior index analyst at Standard & Poor’s.
Exxon Chief Executive Officer Rex Tillerson told analysts at a meeting last month the company would listen to shareholders as it evaluated the payout. The company now is set to pay an annual dividend of $2.28 a share for a yield of 2.6 percent, less than Chevron Corp. (CVX)’s 3.5 percent. Brent crude prices, a benchmark in much of the world, climbed 12 percent in the first quarter from a year earlier to average $118.45.
“I think they’re realizing that we’re in a higher oil- price environment going forward,” said Brian Youngberg, an analyst at Edward Jones in St. Louis who has a “hold” rating on Exxon shares and doesn’t own any. “The feedback they’ve been getting is that the company needs to have a more competitive dividend yield to attract more investors.”
Chevron raised its quarterly dividend 11 percent to 90 cents a share from 81 cents, according to a statement yesterday. That gives Chevron a potential annual dividend of $3.60 a share.
Youngberg said Exxon has relied on stock buybacks to boost shareholder value, while he’d like to see the company raise the dividend further.
“Dividends allow the investor to decide how to reinvest the cash,” he said in an interview yesterday.
Exxon rose 0.6 percent to $86.85 at the close yesterday in New York.
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