You want to know more about the SLB dividend. Well, this is the right place because by the end of this article you will understand what the SLB dividend is, why the distribution was reduced, and why it is a good choice for income investors who can take a bit of risk.
The key takeaway for potential SLB investors is that SLB, formerly Schlumberger, is a multinational organization and the world’s largest operator of oilfield services, period. This is key because the oilfield services industry is in the midst of a generational quality supercycle that began during the COVID-19 pandemic. This super cycle is expected to last up to a decade or more and generate income, profit and capital gains for investors.
The real opportunity right now is dividend increases. Oilfield services stocks are well known, or were so before the pandemic, as dividend producers. Because SLB cut its distribution to preserve capital and cash during the crisis, it is in a position not only to increase its payment, but also to make a series of large annual increases that will help return stock prices to their low levels. all-time highs or higher.
Schlumberger Ltd. Overview
Schlumberger Ltd., d/b/a SLB, is a global oilfield services company and the world’s largest offshore driller. The company operates from 4 main offices located in Paris, Houston, London and The Hague. Shares are listed on the NYSE, Euronext, LSE and Swiss SIX and it is a very large and closely owned company.
SLB was founded in 1926 by two French brothers as the Electrical Prospecting Company. The two had experience conducting geophysical surveys throughout Europe and North America and went into the business providing services and equipment. Among the company’s many feats is the first ever recorded electrical resistivity test of a well, a test used today in the oil and gas industry to assess the structure of geological formations.
The company expanded its operations into the US, logging its first well there in 1929. By 1934, the brothers were opening the Schlumberger Well Survey Company in Houston, Texas. In 1948, the company opened its research division, the Schlumberger-Doll Research Center, and then, in 1956, Schlumberger Ltd. was formed as the holding company for all Schlumberger businesses.
The company continued to grow through expansions and acquisitions until the COVID-19 pandemic hit. While the acquisitions did not end, the company was forced to lay off around 25% of its workforce. Since then, it has been slowly rebuilding the workforce to meet growing industry demand.
The company’s latest innovations focus on GHG and sustainability. It has made advances in carbon capture, methane control, and flaring control that are driving a reduction in emissions globally. While the company is not moving away from carbon-based energy, it is committed to moving the industry forward in a sustainable manner.
SLB Dividend History
SLB is a regular dividend payer, not a constant dividend producer. The company, aside from a 2020 distribution cut related to the COVID-19 pandemic, has only increased its pay, but not at a sustained annual rate. For the first 25 years there were regular increases, but that stopped in 2018 and continued through 2021. Between those two times, the company’s pay dropped from $0.50 per quarter or $2.00 per year to just $0.13 per quarter or $0.54 a year. This is a 73% decline and the payment did not pick up by 2022 when others in the oil and gas industry were already reinstating theirs. Why buy dividend stocks? Because they pay you to own them and they provide leverage for a portfolio.
Schlumberger Dividend Statistics
Schlumberger’s dividend was yielding about 1.35% at the end of 2022 and is expected to increase in the coming years. The pay rate was also low at 32%, which helped fuel expectations for future increases. The only bad news at the time was the -20% CAGR that was due to the COVID-19 related distribution cut in 2020. Prior to that, Schlumberger had only increased its payout since the first dividend distribution in 1989.
Schlumberger internal and institutional property
Insiders don’t have a lot of SLB shares, but they do own some and don’t sell them very often. Institutions, on the other hand, have a large part of the stock, more than 79%, and they have been buying it since 2021 and at an aggressive pace.
Schlumberger Analyst Activity
Analyst sentiment on SLB stock has heated up in 2021 and it has the consensus rating up to a Moderate Buy from a firm hold in previous years. The warming sentiment was compounded by a rising price target that is driving the stock higher. The high price objective has shares at a new multi-year high and completing the reversal in price action that should see shares rally back to all-time highs or higher by the time the supercycle ends.
Schlumberger Debt Ratings
Schlumberger uses debt to finance growth, capital spending and other corporate uses and is rated investment grade by all three major rating agencies.
SLB Dividend Growth CAGR
SLB’s historical dividend CAGR is the compound annual growth rate or the average growth rate of the dividend payment over a given number of years. It’s an important metric for those who want to learn how dividend stocks work. This is usually expressed as a 3, 5, or 10 year CAGR and is used to measure the rate of increase an investor can expect. Because dividend increases can offset the impact of inflation on investment dollars, the higher the better. SLB’s dividend track record shows a mixed CAGR due to the pandemic-driven distribution cut, but is expected to improve significantly over the next decade.
Dividend Capture Strategy for SLB
Step #1 – Objective The Dividend
The first step is to target the dividend you want to capture. Stocks like SLB are a good choice because they make regular payments that are well telegraphed to the market. Once this is done, it’s time to go to the next step.
Step #2 – Buy the shares
Once the dividend is targeted, it’s time to wait for the next declaration. Once declared, watch the stock price for a timely entry point prior to the Record Date. Shares must be owned at the close of business on the Record Date in order for the investor to receive the newly declared distribution amount.
Step #3: Hold Stocks
This step is simple, all you have to do is hold the shares past the Record Date until the Ex-Dividend Date, which is the next day.
Step #4 Sell the shares
This step is more difficult because the price of a stock typically falls by the amount of the dividend on the ex-dividend day. However, if a good entry was made, there should be plenty of scope to produce a profit from the now “captured” dividend payout. When should a dividend stock be sold? The best time is when you can make a profit.
The Schlumberger dividend is growing
Schlumberger cut its distribution during the pandemic, and that was smart. The move did not affect share prices and has helped ensure the balance sheet remains healthy. Now, the payout is as certain as ever and there is a strong outlook for dividend increases in the coming years. Not only is the company in good shape, but a supercycle is underway in oilfield services. That’s a good reason to buy a dividend stock. How to invest in dividend stocks. Very carefully.
Does SLB pay dividends?
Does SLB pay dividends? If it does. The company has healthy cash flow and returns cash to its shareholders on a regular basis.
Does SLB pay monthly dividends?
The dividend on SLB shares is an annualized payment that is distributed in 4 quarterly payments. Payments are declared quarterly after board approval and shares are divided approximately 6 weeks later.
What is Schlumberger performance?
Schlumberger’s dividend yield has varied over time as the share price has changed and so has the amount of the distribution. The return at the end of 2022 was around 1.35%, but that was after a COVID-19-related pay cut that did little to hurt share prices.