There are a handful of large-cap integrated oil companies exploring, producing, refining and selling energy products. The global nature of the energy business has resulted in companies from different countries reaching the status of very large integrated oil companies. The share price results of these large energy companies have been quite similar. An investor looking for more income from a higher dividend yield should consider Royal Dutch Shell (RDS.A) out of the group.
The first order of business is to provide an understanding of the two share classes — A and B — from Royal Dutch Shell. Both share classes have the same shareholder rights and pay the same dividend amounts. The only difference is the taxation of the dividend. Class A share dividends will be subject to a 15% Netherlands withholding tax. Class B share (RDS.B) dividends are not subject to tax withholding. For U.S. investors, if Class A shares are purchased, the taxes withheld can be claimed as a tax credit and the 15% rate matches the dividend income tax rate currently in effect. The Class B shares avoid the hassle of claiming a tax credit when filing taxes. Currently, the Class A shares are trading about $2.20, or 3%, cheaper than the Class B shares. It seems a lot of investors want to simplify their taxes. Buying the cheaper shares picks up an additional 0.13% of dividend yield at the current share prices.
Here is a comparison of the dividend distributions of four of the major integrated oil companies.To continue reading, click here.
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