Why Shell plc (NYSE:SHEL) is a Top FTSE Dividend Stock to Buy Now

As an investor, you're always on the lookout for solid dividend stocks that can provide a steady income stream. Shell plc (NYSE:SHEL), the multinational energy and petrochemical company, is one such stock that deserves your attention. With a dividend yield of 4.10% and a strong track record of dividend growth, Shell is an attractive option for income-focused investors. Let's dive into the reasons why Shell is a top FTSE dividend stock to buy now.



1. Dividend Yield and Payout Ratio

Shell's dividend yield of 4.10% is higher than the average dividend yield of 5.50% for the FTSE 100 index. This means that for every $100 you invest in Shell, you'll receive $4.10 in dividends annually. Additionally, Shell's dividend payout ratio of 56.58% is at a healthy, sustainable level, below 75% of its earnings. This indicates that the company is distributing a significant portion of its earnings to shareholders while still maintaining a strong financial position.



2. Dividend Growth and History

Shell has a history of increasing its dividend, with the most recent increase of $0.0260 on Thursday, May 2, 2024. Assuming a similar growth rate, Shell's dividend could potentially grow at a rate of around 5% per year. This consistent dividend growth ensures that your income from Shell will keep pace with inflation and provide a solid foundation for your retirement or investment portfolio.

3. Strong Financial Performance and Cash Flow

Shell's strong financial performance and cash flow generation make it an attractive choice for dividend investors. In 2020, the company generated $45.1 billion in cash flow from operating activities and $40.3 billion in free cash flow. This cash flow helps support the company's dividend payments and provides a buffer for any fluctuations in earnings.



4. Diversified Business Model and Global Presence

Shell's diversified business model and global presence make it a resilient choice for investors. The company operates in various sectors, including upstream, marketing, chemicals and products, and renewable energy solutions. This diversification helps mitigate risk and ensures that Shell can weather economic downturns and market fluctuations.



5. Analyst Recommendations and Institutional Ownership

Shell's strong financial performance and dividend history have not gone unnoticed by analysts and institutional investors. As of 2025-01-06, 15 analysts have issued buy recommendations for Shell, indicating their confidence in the company's prospects. Additionally, Shell is held by numerous institutional investors, further demonstrating the stock's appeal to professional investors.



In conclusion, Shell plc (NYSE:SHEL) is a top FTSE dividend stock to buy now. With its attractive dividend yield, strong dividend growth history, solid financial performance, and diversified business model, Shell offers income-focused investors a compelling investment opportunity. Don't miss out on the chance to add this dividend powerhouse to your portfolio.