Ever since the invention of the internal combustion engine which powers motor cars, the fossil fuel business, successful companies have been reaping dividends for decades. The biggest company was Standard Oil owned by the Rockefellers which made John D the wealthiest person in the world. Since the fossil fuel industry has made many millionaires and paid billions in dividends. The most profitable company in the world is Saudi Aramco and with higher oil and natural gas prices, companies in the oil and gas sector are raising dividends.
In an article from Reuters, the President of Harvard University Lawrence Bacow wrote on the school’s website, the endowment fund has no direct investment in fossil fuel exploration or development companies. The change has taken place since 2018. The reason why the announcement is important is because the Harvard University endowment fund is the largest in the university sector with assets under administration of $42 billion.
The fund provides up to 10% of the school’s budget and not being in the oil and gas funds means they had to find equivalent dividend paying companies. The good new is they exist, it is just easier in the oil and gas sector.
Linking to dividend paying stocks, when investors examine long track records of companies paying dividends, it is easy to find them in the oil and gas sector and these companies have traditionally been some of the largest payers of dividends on the stock market. Microsoft recently overtook ExxonMobil as the largest payer, and in England, BP is the largest dividend payer. As an individual investor, not being in one field or another is relatively easy to do, but as the fund gains in size, it is tougher to do as oil and gas holding are included in many funds including index funds. It is possible.
There are more questions than answers, till the next time – to raising questions.