Thursdays City diary is chock-a-block with blue-chips though whilst all with have their own particular COVID-19 related threats and challenges, they all have to answer the same question for investors – which is, will they still pay a dividend.
BPs decision on Tuesday to maintain its quarterly payment perhaps bodes well for shareholders of Royal Dutch Shell Plc (LON:RDSB) which is larger and potentially has greater capacity to weather losses.
Lloyds Banking Group PLC (LON:LLOY) is the next bank on the roster to put itself under investors scrutiny, following Barclays warning that its profits fell by more than a third in anticipation of COVID-19 triggered loan losses.
Soap, detergent and disinfectant sales may provide some silver lining, at least in narrative, for Reckitt Benckiser Group PLC (LON:RB.) though it is quite obviously a much bigger business than that, and, consumer spending with likely be a broader cause for concern.
Question over top dividend payer Shell
Whether or not theses supermajors will retain their dividends will naturally be the key concern for most shareholders.
Shell typically pays the largest dividend in the FTSE 100, around US$15.9bn, and, so far close to US$30bn of blue-chip payouts have so far been cancelled.
Stockbroker AJ Bell, in a preview, noted that Shells average oil sales price was US$56.60 a barrel in the fourth quarter and that the latest collapse this week (down briefly into negative pricing) came three weeks after the Q1 reporting period.
“Just how far have profits in the upstream business fallen and has Shell decided to take any further asset impairment charges after the $2.3 billion hit taken on US onshore oil assets, Australian gas operations and the downstream business in the US and Singapore in Q4 2019,”
“Shell has shown its determination to defend its $1.88-per-share dividend,” AJ Bell said.
The stockbroker highlighted consensus forecast for a slight dividend cut, to US$1.74 per share, but, also that theres a huge range in estimates from as high as US$1.91 and as low as US$0.31.
Trading updates about a month ago suggested that both BP and Shell could afford to keep up their dividend payments in the short term, but, that was before crude prices nosedived further.
Impairments eyed for Lloyds
“Well also be paying particular attention to lending trends in the higher risk credit cards, unsecured lending and car finance divisions which have become increasingly important in recent years.”
UBS forecasts Lloyds will take around £1bn of impairments, assuming “fairly material one-off charges relating to life insurance volatility and similar mark-to-market issues below the line” in the quarter.
Sainsburys checks its receipts
Final results for J Sainsbury PLC (LON:SBRY) on Thursday will provide some clarity on how the supermarkets sales have fared during Marchs spate of shopping sprees as consumers stocked up ahead of the government lockdown.
Across the sector, Britains supermarkets have struggled to keep up with rocketing demand puts unprecedented strain on their capacity and supply chains, although this had the beneficial effect of soaring sales.
However, results from Tesco this month showed that the upswing in demand can also increase costs, so investors will be looking to see if Sainsburys has faced similar issues.
Other areas in focus will be the groups financial position and the outlook for its dividend as the lockdown stretches on.
Is Reckitt still enjoying demand for hygiene?
Other than that, the conglomerate is going through structural change, so investors will want to hear on developments on this front.
Analysts at the Share Centre pointed out that the market did not react particularly well to previous restructuring plans.
St Jamess Place fund levels eyed
The first-quarter figures for wealth management firm St Jamess Place PLC (LON:STJ) on Thursday will give investors another chance to scrutinise the firms funds under management (FUM), which in its full-year figures in February showed a 13% drop in net inflows despite a FUm increase of 22% to £117bn.
Also under the microscope will be any news on growth in advisor numbers and the companys client retention rate, although as with other firms the dividend outlook may be at the front of many shareholders minds.
Thursday 30 April:
Trading announcements: Royal Dutch Shell PLC (LON:RDSB), Lloyds Banking Group PLC (LON:LLOY), Reckitt Benckiser Group PLC (LON:RB.), Schroders PLC (LON:SDR), St Jamess Place PLC (LON:STJ), G4S PLC (LON:GFS), Glencore PLC (LON:GLEN), Evraz PLC (LON:EVR), Hikma Pharmaceuticals PLC (LON:HIK), Read More – Source