Royal Dutch Shell will report third quarter results on Thursday having provided investors with a 42% return in 2021 and over 80% since coronavirus vaccines were first announced.
With the Shell share price providing investors with a solid return already this year, the market will be keen to see if key performance figures are enough to provide shares with impetus for another leg higher.
Profit
Shell report profit on a current cost of supplies (or CCS) basis. In the second quarter, Shell reported pre-tax profit of $2.6 billion and $5.5 billion on an underlying basis.
A year ago Shell made a mere $177 million on a CCS basis and $955 million underlying profit.
This year the market will have to digest the impact of higher energy prices leading to higher revenue and earnings, but also the impact of Hurricane Ida which is thought to have cost the group $400 million.
Cash Flow
Investors will be looking at how much Shell distributes through dividends and buyback which is derived from cash flow from operations. This is set to be strong as analysts have forecast Capex around $19.5bn, unchanged from last year.
With income rising from energy sales and refinery business, a constant Capex will mean more available to distribute to investors.
Shell dividend
Analysts estimate the Shell dividend will be 84 cents for 2021 which would provide investors with a 3.4% yield at a Shell share price of 1,790p and a GBP/USD exchange rate of 1.3800.
This is by no means anywhere near the highest dividend yield Shell has provided investors historically. It is, however, more than respectable given the rough ride income investors had during the pandemic.
Shell are also due to finish a $2bn share buyback before or around these results so one of the major factors driving the Shell share price in the short term will be any news on what they plan for share buybacks for the rest of the year.