Royal Dutch Shell PLC (RDS.A) and Its Rivals Critical Analysis

Royal Dutch Shell PLC (NYSE: RDS.A) is one of 23 public companies in the “Integrated Oil & Gas” industry, but how does it contrast to its rivals? We will compare Royal Dutch Shell PLC to similar companies based on the strength of its earnings, institutional ownership, dividends, profitability, valuation, analyst recommendations and risk.

Risk and Volatility

Royal Dutch Shell PLC has a beta of 1.04, indicating that its share price is 4% more volatile than the S&P 500. Comparatively, Royal Dutch Shell PLC’s rivals have a beta of 1.44, indicating that their average share price is 44% more volatile than the S&P 500.

Dividends

Royal Dutch Shell PLC pays an annual dividend of $3.20 per share and has a dividend yield of 5.0%. Royal Dutch Shell PLC pays out 123.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Integrated Oil & Gas” companies pay a dividend yield of 3.5% and pay out 139.3% of their earnings in the form of a dividend. Royal Dutch Shell PLC is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Royal Dutch Shell PLC and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Royal Dutch Shell PLC $233.59 billion $4.58 billion 24.58
Royal Dutch Shell PLC Competitors $78.49 billion -$196.03 million -186.76

Royal Dutch Shell PLC has higher revenue and earnings than its rivals. Royal Dutch Shell PLC is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Institutional & Insider Ownership

6.4% of Royal Dutch Shell PLC shares are owned by institutional investors. Comparatively, 40.2% of shares of all “Integrated Oil & Gas” companies are owned by institutional investors. 1.0% of Royal Dutch Shell PLC shares are owned by insiders. Comparatively, 9.8% of shares of all “Integrated Oil & Gas” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Royal Dutch Shell PLC and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Dutch Shell PLC 3.71% 6.64% 3.13%
Royal Dutch Shell PLC Competitors -7.83% 2.88% 1.15%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Royal Dutch Shell PLC and its rivals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Dutch Shell PLC 1 4 9 0 2.57
Royal Dutch Shell PLC Competitors 263 762 842 38 2.34

Royal Dutch Shell PLC currently has a consensus target price of $57.03, suggesting a potential downside of 10.75%. As a group, “Integrated Oil & Gas” companies have a potential upside of 30.29%. Given Royal Dutch Shell PLC’s rivals higher possible upside, analysts plainly believe Royal Dutch Shell PLC has less favorable growth aspects than its rivals.

Summary

Royal Dutch Shell PLC beats its rivals on 10 of the 15 factors compared.

About Royal Dutch Shell PLC

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.

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