Shares of ExxonMobil (XOM) slumped Wednesday afternoon after the oil giant announced a 2 cent increase to its quarterly dividend, the same amount as last year, which was one of the smallest in years.
The stock closed down 33 cents at $81.40, with most of the decline coming after the 2 p.m. dividend announcement.
The hike brings Exxon’s payout to 77 cents a quarter up from 75 cents. On an annual basis it’s a 2.7% hike and brings the yield to 3.78%, up from 3.69%, based on the closing price of $81.40 on Wednesday.
Some investors were expecting an increase of 78 cents a quarter, but Brad Heffern of RBC Capital Markets deemed it in line with estimates. His view on the shares:
We continue to like XOM for its much lower oil price breakeven versus peers as well as its free cash flow generation and strong operations track record. However, we do think that XOM will likely lag its peers with more operating leverage in any significant oil price rebound.
The dividend is payable on June 9 to shareholders of record at the close of business on May 12, 2017. This is Exxon’s 35th consecutive year of dividend increases.