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Is Shell (NYSE:SHEL) the Top Oil Dividend Stock to Buy in 2024?

Shell Plc (NYSE:SHEL ranks 6th in Insider Monkey’s list of the 9 Best Energy Dividend Stocks to Buy Now.

Click to see the full list of 9 Best Energy Dividend Stocks to Buy Now.

Before analyzing Shell Plc (NYSE:SHEL), let’s see what’s happening in the dividend investing space these days.

Volatility is prevailing in the energy sector amid geopolitical risks, China-related growth worries and overall fear of recession as inflation remains elevated across the globe. Edward Jones in an industry report earlier this month said that it expects oil prices to stay higher than its expectations throughout 2024. Edward Jones said it is looking to own stocks in the integrated oil and storage & transportation subsectors. The firm said its focus is on companies with strong balance sheets that could weather the volatility in commodity prices and pay dividends.


The Missouri-based investment banking company said the average dividend yield of the energy sector is more than double the market yield, which makes integrate oil & gas and storage & transportation stocks with Buy ratings a "compelling combination" of high yields and dividend growth.

Edward Jones also believes energy companies are finally starting to practice some capital-spending discipline, after having "outspent" their cash flows for "years." The firm, however, lamented over the energy sector's lackluster performance track record, which it believes is the reason why investors are reluctant when it comes to investing in energy stocks. Edward Jones said the sector's overall share of the S&P has fallen from over 14% in 2008 to approximately 3.9% as of May 15. However, the sector is showing signs of a rebound.

A Franklin Templeton report published earlier this month said that the energy sector has been the best performer within the MSCI All Country World Index, delivering around 10.3% of YTD total return. The report said the Templeton Global Equity Group is preferring to invest in energy stocks that are not dependent on near-term oil prices. Franklin Templeton also praised the sectors FCF generation, saying the free cash flow yield of the MSCI AC World Energy Index came in at 8.8%, compared to the 4% of the MSCI.

Shell Plc (NYSE:SHEL)

Number of Hedge Fund Investors: 50

With over 3.5% dividend yield and strong cash flow position, Shell Plc (NYSE:SHEL) is one of the best energy dividend stocks to buy according to hedge funds. Shell Plc (NYSE:SHEL) recently posted strong Q1 results, and announced that it will buy back $3.5 billion of its shares over the next three months. Shell has paid dividends consistently since 1985. Dividends are currently distributed on a quarterly basis. As of the end of March, Shell's payout ratio is 48%, which is lower, and shows the company is investing in future growth.

Of the 919 hedge funds tracked by Insider Monkey, 50 hedge funds reported owning stakes in Shell Plc (NYSE:SHEL). The most notable stake in Shell Plc (NYSE:SHEL) is owned by Fisher Asset Management, worth over $1.6 billion.

Shell Plc (NYSE:SHEL) ranks 6th in Insider Monkey’s list of the 9 Best Energy Dividend Stocks to Buy Now.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.