Facts That Make Royal Dutch Shell a Long-Term Hold

Facts That Make Royal Dutch Shell a Long-Term Hold


In days like these, when markets tend to be more prone to correction, many investors often lose sight of the big picture. Hustle and bustle comes, emotions are spreading and all the good intentions, with which one originally started, are sometimes thrown overboard. What always helps me when a little hectic sets in is the question: where will stock X be in five years? And to do this three times, I’ve picked one popular dividend stock that we’re going to discuss today.

The future of Royal Dutch Shell

As we can easily see, the shares of Royal Dutch Shell are now in a bear market territory (just 3.7% up from week low). Currently, the stock trades at a price of $60. The correction has not left the British oil and gas giant without an impact. RDS.A shares, which are up 1.3 percent in a week, close 1.62 percent higher in trading Wednesday.

But in the long term there are many factors that should keep Royal Dutch Shell investors confident. Because even in five years, oil will continue to be in demand as a raw material, even if at this time there is probably more doomsday predictions that prophesied the end of the oil at least as a fuel.

In the next five years, however, oil could for the time being become significantly scarce. Lack of investment in recent years could lead to a supply shortage that cannot offset rising demand. Politically unresolved conflicts with the Middle East could also have a supportive or even restrictive effect.

All these are therefore still good reasons, at least for Royal Dutch Shell, which is largely dependent on oil prices. The dividend, which has remained constant since 1947, is therefore likely to remain at least constant during this period – and will later provide handsome dividend yields.

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Zac Berry is presently a full time editor at Market Morning. He covers the M&As and follows live market commentary. Before joining Markets Morning, Zac Berry worked with a start-up, where he worked in the capacity of a Team Leader tracking company events and results. Born in the U.A.E, he spent most of his growing up years in Dubai. Currently, he resides in U.S. and is pursuing his charter in Accountancy.