Analyzing Statoil ASA (STO) & Royal Dutch Shell PLC (RDS.B)
Royal Dutch Shell PLC (NYSE: RDS.B) and Statoil ASA (NYSE:STO) are both large-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitabiliy, valuation, risk, institutional ownership, earnings and analyst recommendations.
This table compares Royal Dutch Shell PLC and Statoil ASA’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Royal Dutch Shell PLC||2.95%||4.73%||2.17%|
This is a breakdown of recent ratings for Royal Dutch Shell PLC and Statoil ASA, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Royal Dutch Shell PLC||0||1||0||0||2.00|
Statoil ASA has a consensus target price of $18.50, indicating a potential upside of 12.19%.
Royal Dutch Shell PLC pays an annual dividend of $3.76 per share. Statoil ASA pays an annual dividend of $0.76 per share and has a dividend yield of 4.6%. Royal Dutch Shell PLC pays out 201.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Statoil ASA pays out -97.4% of its earnings in the form of a dividend. Royal Dutch Shell PLC has raised its dividend for 4 consecutive years. Statoil ASA is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares Royal Dutch Shell PLC and Statoil ASA’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Royal Dutch Shell PLC||N/A||N/A||N/A||$1.87||N/A|
|Statoil ASA||$51.07 billion||1.04||$15.78 billion||($0.78)||-21.14|
Statoil ASA has higher revenue and earnings than Royal Dutch Shell PLC. Statoil ASA is trading at a lower price-to-earnings ratio than Royal Dutch Shell PLC, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
5.2% of Royal Dutch Shell PLC shares are held by institutional investors. Comparatively, 5.0% of Statoil ASA 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, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
Royal Dutch Shell PLC has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Statoil ASA has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500.
Royal Dutch Shell PLC beats Statoil ASA on 8 of the 14 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.
Statoil ASA Company Profile
Statoil ASA (Statoil) is an energy company. The Company is engaged in oil and gas exploration and production activities. The Company’s segments include Development and Production Norway (DPN), Development and Production International (DPI), Marketing, Midstream and Processing (MMP) and Other. DPN segment manages the Company’s upstream activities on the Norwegian continental shelf (NCS) and explores for and extracts crude oil, natural gas and natural gas liquids. DPI segment manages the Company’s upstream activities that are not included in the DPN and Development and Production USA (DPUSA) business areas. MMP segment manages its marketing and trading activities related to oil products and natural gas, transportation, processing and manufacturing, and the development of oil and gas. Other segment includes activities in New Energy Solutions (NES), Technology, Projects and Drilling (TPD), Global Strategy and Business Development (GSB), and Corporate staffs and support functions.
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