Royal Dutch Shell plc ADR Class B (NYSE: CVX) and Chevron (NYSE:CVX) are both large-cap oils/energy companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.
Earnings & Valuation
This table compares Royal Dutch Shell plc ADR Class B and Chevron’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Royal Dutch Shell plc ADR Class B||$305.18 billion||0.91||$12.98 billion||N/A||N/A|
|Chevron||$141.72 billion||1.60||$9.20 billion||$3.70||32.07|
Royal Dutch Shell plc ADR Class B has higher revenue and earnings than Chevron.
Royal Dutch Shell plc ADR Class B pays an annual dividend of $3.76 per share and has a dividend yield of 5.6%. Chevron pays an annual dividend of $4.48 per share and has a dividend yield of 3.8%. Chevron pays out 121.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Chevron has increased its dividend for 32 consecutive years.
This is a breakdown of recent ratings and target prices for Royal Dutch Shell plc ADR Class B and Chevron, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Royal Dutch Shell plc ADR Class B||0||1||0||0||2.00|
Chevron has a consensus price target of $139.24, suggesting a potential upside of 17.39%. Given Chevron’s stronger consensus rating and higher probable upside, analysts clearly believe Chevron is more favorable than Royal Dutch Shell plc ADR Class B.
Risk and Volatility
Royal Dutch Shell plc ADR Class B has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Chevron has a beta of 1.1, meaning that its share price is 10% more volatile than the S&P 500.
Institutional & Insider Ownership
5.4% of Royal Dutch Shell plc ADR Class B shares are held by institutional investors. Comparatively, 65.1% of Chevron shares are held by institutional investors. 1.0% of Royal Dutch Shell plc ADR Class B shares are held by insiders. Comparatively, 0.5% of Chevron shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
This table compares Royal Dutch Shell plc ADR Class B and Chevron’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Royal Dutch Shell plc ADR Class B||5.64%||9.22%||4.50%|
Chevron beats Royal Dutch Shell plc ADR Class B on 9 of the 16 factors compared between the two stocks.
About Royal Dutch Shell plc ADR Class B
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.
Chevron Corporation, through its subsidiaries, engages in integrated energy, chemicals, and petroleum operations worldwide. The company operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as operates a gas-to-liquids plant. The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil and refined products; transporting crude oil and refined products through pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing commodity petrochemicals, and fuel and lubricant additives, as well as plastics for industrial uses. It is also involved in the cash management and debt financing activities; insurance operations; real estate activities; and technology businesses. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California.
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