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Three oil giants reported bumper profits on Thursday, but only one raised its dividend. The higher pay-out – a 5 per cent increase over a year ago – came from ExxonMobil. That might ease the discomfort being felt at Shell. Europe’s biggest oil company did not raise its dividend, but it still finds itself uncomfortably bucking an industry trend – its yield is higher than its peers.

In fiscal 2009, when Shell last increased its pay-out, it was hoping to be in line with industry practice. Yet since then, BP has suspended dividends due to the Gulf of Mexico disaster, and three Europeans – Eni, Repsol and Statoil – have cut pay-outs. Shell is now the biggest dividend payer by far in the FTSE 100, and also yields much more than the US majors.

The strategy of Peter Voser, chief executive, after Shell’s stumbles earlier in the decade, is delivering for investors. Third-quarter results saw an 18 per cent jump in net income. The shares are also outperforming: a 10 per cent total return in sterling terms so far this year against 9 per cent for the FTSE All-share index, negative 29 per cent for BP and negative 2 per cent in dollars for ExxonMobil.

Shell’s pay-out ratio is about 60 per cent against an industry average – now more like an industry aim – of 50 per cent. Shell arguably got ahead of itself with its 2009 increase. But feeling exposed is not a reason to cut the dividend. There might be a better reason: to raise capital expenditure. Shell’s capex relative to enterprise value is 12.3 per cent, against BP’s 13.1 per cent, according to ING. Shell generates plenty of cash; it may be time to spend a little more of it on itself and a little less on investors.

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