Why I’m buying more of this near-9% yield FTSE 100 share
Tom Rodgers owns shares in Royal Dutch Shell. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Our 6 ‘Best Buys Now’ Shares Enter Your Email Address Tom Rodgers | Saturday, 29th February, 2020 | More on: RDSB “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Image source: Getty Images. Why I’m buying more of this near-9% yield FTSE 100 share Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! See all posts by Tom Rodgers Simply click below to discover how you can take advantage of this. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Long-term investors have a thing about FTSE 100 giant Royal Dutch Shell (LSE:RDSB). Whatever you may think of the green renewable revolution it won’t be instant and the world will still need oil for some time.Take, for example, research by the cross-governmental International Energy Agency. It says while demand for renewable energy is on the rise, fossil fuels will still remain a significant part of the energy mix.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…In fact, its 2019 World Outlook predicted that by 2040 oil and gas would still make up 74% of all energy generation.Shell’s long-term strength puts it in prime position to keep producing solid dividends from the industry over the next 20 years.Short-term fallThe cratering oil price in the past week – a consequence of coronavirus-induced lower demand – has certainly hurt the Shell share price. In response to the viral outbreak, OPEC (Organization of the Petroleum Exporting Countries) revised down its global demand forecast by 200,000 barrels a day for 2020.Those covering the oil industry have a tendency to go a little overboard with their descriptions. I read one article about oil prices in the short term that claimed there would be “severe demand destruction“. The piece went on to say that analysts had predicted oil prices would recover by summer 2020.Saudi Arabia has since called for a production cut of 600,000 barrels a day. And even with a drop on this scale, oil prices could remain weakened until April, analysts suggest. That said, a couple of months of weakness is nothing to long-term investors.Think 10 or 20 years ahead and you’ll get a better sense of whether an investment like Shell represents good value.That near-9% dividendAt the current share price the dividend yield is a sky-high 8.8%. By my calculations it would take less than nine years for an investor to double his or her money if all dividends were reinvested.As I’ve said before, it’s easier to get serious compound gains over time from higher-yielding companies. Shell is ex-dividend at the moment. It’s one reason why the shares slid 5% as the end of the week approached.Some investors will invest in high-yielding companies just before the dividend date. There’s nothing wrong with this. But it’s more work than I’m willing to do, to be honest, working out ex-dividend payment dates.I’d rather dig into a company’s balance sheet and its prospects for the future to figure out whether I’m willing to put it on my watchlist. Once there, it has to cut its dividend, make management mistakes, or report a long-term drop in earnings or profits to come off my list.I’m not even too concerned about Shell’s recent set of results. Chief executive Ben van Buerden said Shell had produced a “competitive cash flow performance” across the year. With a price-to-earnings ratio around 10 and the share price now hovering at levels we’ve not seen since May 2016, Shell still remains a buy for me.