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During a time when tech firms and semiconductor companies are all the rage, investors are always looking to find the next Apple (AAPL - Free Report) or Amazon (AMZN - Free Report) in the hopes of reaping outsized returns.
This is not a bad investment strategy, as these companies, which help power and drive the modern world, have grown exponentially over the last few years. In fact, just last week, Apple became the first public company in the U.S. to hit $900 billion in market value. Still, in this growth-infatuated stock market, some investors discount companies in more traditional industries that present strong value.
A company that investors might consider on top of their tech-based growth plays is value-laden Royal Dutch Shell PLC . The oil and gas giant is coming off a strong third quarter and might be positioned well going forward, especially as oil prices begin to rise again.
On top that, Shell has made a series of cost cutting measures that have helped it become a more profitable business. Shell is currently a Zacks Rank #2 (Buy) and sports a “B” grade for Value in our Style Scores system. Shell also belongs to a group of businesses that sits in the top 10% of the 265 different industries tracked by Zacks.
With that said, let’s take a deeper look into Shell’s recent quarterly results, as well as more of its current fundamentals, to help demonstrate the company’s value to investors.
Fundamentals
Brent crude, an international oil price benchmark, hovered around $52 a barrel in the third quarter. Just last week, the price jumped above $60 a barrel for the first time in two years, which is great for Shell since Brent averaged around $30 a barrel at the start of 2016. This positive industry trend has helped shares of Shell surge almost 19% in the last 12 weeks.
Stronger oil prices also helped Shell post $3.7 billion in Q3 profits last week, which marks a massive jump from the $1.4 billion it reported in the year-ago period.
Shell is currently trading at 18.52x earnings, which is slightly above the “Oil and Gas –Integrated – International” industry’s average P/E ratio of 18.08. However, compared to fellow giants Exxon Mobil (XOM - Free Report) and BP PLC (BP - Free Report) , which are both trading at over 23x earnings, Shell offers greater value.
On top of a strong P/E ratio, Shell’s 0.94 P/S ratio and 1.37 P/B ratio both compare favorably to the industry’s average.
Value-focused investors might also be excited to find out that Shell currently presents a solid dividend yield of 4.88%.
Based on these value metrics, Shell could be a stock for investors to consider. But for those growth-minded investors who have second thoughts, Shell also currently rocks a “B” grade for Growth and an “A” for Momentum, which help it earn an overall “A” VGM grade.
Shell’s earnings are set to soar over 63% in the fourth quarter to help its EPS skyrocket 92% for the full-year, based on our current consensus estimates. Lastly, Shell has topped earnings estimates in four of the last five quarters.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them? Starting today, and for the next month, you can follow all Zacks’ private buys and sells in real time. Our experts cover all kinds of trades: value, momentum, ETFs, stocks under $10, stocks that corporate insiders are buying up, and companies that are about to report positive earnings surprises. You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>
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Is Royal Dutch Shell (RDSA) A Great Value Stock?
During a time when tech firms and semiconductor companies are all the rage, investors are always looking to find the next Apple (AAPL - Free Report) or Amazon (AMZN - Free Report) in the hopes of reaping outsized returns.
This is not a bad investment strategy, as these companies, which help power and drive the modern world, have grown exponentially over the last few years. In fact, just last week, Apple became the first public company in the U.S. to hit $900 billion in market value. Still, in this growth-infatuated stock market, some investors discount companies in more traditional industries that present strong value.
A company that investors might consider on top of their tech-based growth plays is value-laden Royal Dutch Shell PLC . The oil and gas giant is coming off a strong third quarter and might be positioned well going forward, especially as oil prices begin to rise again.
On top that, Shell has made a series of cost cutting measures that have helped it become a more profitable business. Shell is currently a Zacks Rank #2 (Buy) and sports a “B” grade for Value in our Style Scores system. Shell also belongs to a group of businesses that sits in the top 10% of the 265 different industries tracked by Zacks.
With that said, let’s take a deeper look into Shell’s recent quarterly results, as well as more of its current fundamentals, to help demonstrate the company’s value to investors.
Fundamentals
Brent crude, an international oil price benchmark, hovered around $52 a barrel in the third quarter. Just last week, the price jumped above $60 a barrel for the first time in two years, which is great for Shell since Brent averaged around $30 a barrel at the start of 2016. This positive industry trend has helped shares of Shell surge almost 19% in the last 12 weeks.
Stronger oil prices also helped Shell post $3.7 billion in Q3 profits last week, which marks a massive jump from the $1.4 billion it reported in the year-ago period.
Shell is currently trading at 18.52x earnings, which is slightly above the “Oil and Gas –Integrated – International” industry’s average P/E ratio of 18.08. However, compared to fellow giants Exxon Mobil (XOM - Free Report) and BP PLC (BP - Free Report) , which are both trading at over 23x earnings, Shell offers greater value.
On top of a strong P/E ratio, Shell’s 0.94 P/S ratio and 1.37 P/B ratio both compare favorably to the industry’s average.
Value-focused investors might also be excited to find out that Shell currently presents a solid dividend yield of 4.88%.
Based on these value metrics, Shell could be a stock for investors to consider. But for those growth-minded investors who have second thoughts, Shell also currently rocks a “B” grade for Growth and an “A” for Momentum, which help it earn an overall “A” VGM grade.
Shell’s earnings are set to soar over 63% in the fourth quarter to help its EPS skyrocket 92% for the full-year, based on our current consensus estimates. Lastly, Shell has topped earnings estimates in four of the last five quarters.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them? Starting today, and for the next month, you can follow all Zacks’ private buys and sells in real time. Our experts cover all kinds of trades: value, momentum, ETFs, stocks under $10, stocks that corporate insiders are buying up, and companies that are about to report positive earnings surprises. You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for Zacks' secret trade>>