Shell Announces Shareholder Payouts Boost, Launches $3.5B Buyback Program

Yahoo

25-03-2025

March 25 - Shell (SHEL, Financial) plans to ramp up shareholder returns while tightening spending as it strengthens its focus on liquefied natural gas (LNG). Ahead of its Capital Markets Day 2025 event, the company laid out a strategy that boosts shareholder distributions and streamlines costs.
Shell aims to return 40-50% of its cash flow from operations to shareholders, increasing from the previous 30-40% range. The company also maintains a 4% annual dividend growth target and expects free cash flow per share to rise by over 10% per year through 2030.
Capital spending will be trimmed to $20-22 billion annually through 2028, a reduction from the $22-25 billion target set for 2024 and 2025. Shell also revised its cost-cutting goal, aiming for cumulative savings of $5-7 billion by 2028, up from the $2-3 billion originally planned for 2022.
As the world's largest LNG trader, Shell expects its integrated gas and upstream output to grow 1% annually through 2030, with LNG sales rising 4-5% per year. Meanwhile, oil production will hold steady at 1.4 million barrels per day until the end of the decade.
A shift toward lower-carbon investments remains part of Shell's plan, with 10% of capital allocation directed toward this segment by 2030.
Despite the earnings miss, Shell raised its dividend per share by 4% and initiated a $3.5 billion stock buyback program. Analysts at RBC noted that while Shell's update signals continuity rather than drastic change, stronger cost reductions, lower capital expenditure guidance, and higher-than-expected shareholder returns position the company favorably.
This article first appeared on GuruFocus.