Cenovus Energy (CVE) vs. Royal Dutch Shell PLC (NYSE:RDS.B) Head to Head Review

Royal Dutch Shell PLC (NYSE: RDS.B) and Cenovus Energy (NYSE:CVE) are both large-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Profitability

This table compares Royal Dutch Shell PLC and Cenovus Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Dutch Shell PLC 2.93% 6.04% 2.80%
Cenovus Energy 17.89% 3.20% 1.46%

Risk & Volatility

Royal Dutch Shell PLC has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Cenovus Energy has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares Royal Dutch Shell PLC and Cenovus Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Dutch Shell PLC N/A N/A N/A $1.96 N/A
Cenovus Energy $12.32 billion 0.94 $1.83 billion $1.80 5.21

Cenovus Energy has higher revenue and earnings than Royal Dutch Shell PLC. Royal Dutch Shell PLC is trading at a lower price-to-earnings ratio than Cenovus Energy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Royal Dutch Shell PLC and Cenovus Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Dutch Shell PLC 0 0 0 0 N/A
Cenovus Energy 2 3 8 0 2.46

Cenovus Energy has a consensus price target of $16.79, suggesting a potential upside of 78.95%.

Insider and Institutional Ownership

4.9% of Royal Dutch Shell PLC shares are held by institutional investors. Comparatively, 54.8% of Cenovus Energy shares are held by institutional investors. 1.0% of Royal Dutch Shell PLC shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Royal Dutch Shell PLC pays an annual dividend of $3.76 per share. Cenovus Energy pays an annual dividend of $0.16 per share and has a dividend yield of 1.7%. Royal Dutch Shell PLC pays out 191.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cenovus Energy pays out 8.9% of its earnings in the form of a dividend. Cenovus Energy is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Cenovus Energy beats Royal Dutch Shell PLC on 7 of the 12 factors compared between the two stocks.

Royal Dutch Shell PLC Company Profile

The Royal Dutch Shell plc explores for crude oil and natural gas around the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company’s segments include Integrated Gas, Upstream, Downstream and Corporate. The Integrated Gas segment is engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products, as well as projects with an integrated activity, ranging from producing to commercializing gas. The Upstream segment includes the operations of Upstream, which is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids, and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen from mined oil sands and conversion into synthetic crude oil. The Downstream segment is engaged in oil products and chemicals manufacturing, and marketing activities.

Cenovus Energy Company Profile

Cenovus Energy Inc is a Canada-based integrated oil company. It operates in the business of developing, producing and marketing crude oil, Natural Gas Liquids (NGLs) and natural gas in Canada. The Company also conducts marketing activities and owns refining interests in the United States (U.S.). Its segments include: Oil Sands, which includes the development and production of bitumen and natural gas in northeast Alberta; Conventional, which includes the development and production of conventional crude oil, NGLs and natural gas in Alberta and Saskatchewan, including the heavy oil assets at Pelican Lake, the carbon dioxide (CO2) enhanced oil recovery (EOR) project at Weyburn and emerging tight oil opportunities; Refining and Marketing, which includes transporting and selling crude oil and natural gas and joint ownership of refineries in the U.S., as well as Corporate and Eliminations.

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