A $3 Billion Reason to Buy Shell Stock Here (Plus It Has a Juicy 3.5% Dividend Yield)

With a yield of about 3.5%, Shell (SHEL) is once again proving that it’s one of the most rewarding income-generating stocks in the energy sector. Making that even clearer, the company just announced a $3 billion stock buyback program, which will be completed by July 24. The firm also recently declared a quarterly dividend of $0.7812 per ADS, which is payable on June 29 to shareholders of record as of May 22. This all comes as part of Shell’s commitment to return capital to shareholders.

“Today, consistent with our value driven capital allocation philosophy, we are rebalancing our shareholder distributions, with a $3 billion share buyback programme for the next 3 months and a 5% increase in the dividend, in line with our existing 40-50% of CFFO [cash flow from operating activities] distribution policy," said CEO Wael Sawan in the press release for the first quarter of 2026.

More News from Barchart

• Ignore the Foundry Fears and Keep Buying Taiwan Semi Stock

• Dear Analog Devices Stock Fans, Mark Your Calendars for May 20

• Dear Intuit Stock Fans, Mark Your Calendars for May 20

• Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today!

Shell Will Continue to Reward Shareholders

For SHEL stock investors, the story here isn’t just about gushing oil prices. It’s about how the company is using its massive $17.2 billion in cash from operations to boost its stock price and reward shareholders. With the buyback, shares will be repurchased over about three months and then be cancelled.

By reducing the overall share count through cancellation, the company can boost its EPS and improve cash flow per share. Oftentimes, this will boost the stock and enhance dividends along the way.

Shell has a history of buying back stock aggressively. In fact, the latest $3 billion announcement now marks the company's 17th consecutive quarter of at least $3 billion in repurchases.

Strong Earnings Are Also Fueling Big Returns

Shell posted strong Q1 earnings, with adjusted earnings of $6.92 billion. That beat expectations of $6.1 billion. A year ago, the company posted adjusted earnings of $5.58 billion. “Shell delivered strong results enabled by our relentless focus on operational performance in a quarter marked by unprecedented disruption in global energy markets,” said Sawan.

Net debt did jump to $52.6 billion from $45.7 billion in the previous quarter. However, this was because of the working capital effect. “When you have rising oil prices, there is a negative effect in terms of the value of inventories,” noted Quilter Cheviot Investment Management analyst Maurizio Carulli to CNBC.