Exxon maintains commitment to pay S&P 500’s third-highest dividend

By Kevin Crowley on 10/29/2020

HOUSTON (Bloomberg) --Exxon Mobil is maintaining the third-highest dividend in the S&P 500 Index, underscoring its historic commitment to the payout despite this year’s virus-driven oil crash.

Investors will be paid 87 cents a share for the current quarter, matching the level of the last six periods, the Irving, Texas-based company said in a statement. The oil giant trails only Microsoft Corp. and AT&T Inc. among S&P 500 companies in payouts to shareholders over the past 12 months, according to Bloomberg data.

Earlier this month, Exxon CEO Darren Woods said in an email to staff that the company plans to lay off an unspecified number of employees as low oil prices force the company to delay major projects.

Payout Problems

The plunge in crude prices and demand for petroleum products caused by the pandemic sent shock waves through the world’s energy markets this year and came at a bad time for Exxon, which was in the middle of a costly upgrade of its oil and gas assets. Exxon is now consistently funding the payout with borrowed money for the first time in decades.

Executives pledged a “great commitment” to the dividend in July, and vowed to row back growth plans, capital spending and cut jobs to defend it. But investors aren’t yet convinced. The stock’s dividend yield has risen to more than 10% for most of the past five weeks.

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