How Does Shell’s Price-To-Earnings-To-Growth Ratio Compare?



Shell’s price-to-earnings-to-growth ratio

In this part, we’ll compare Royal Dutch Shell’s (RDS.A) PEG (price-to-earnings-to-growth) ratio with its peers’. We’ve considered the mean estimated PEG ratio, which depicts a stock’s valuation after factoring in the expected future growth rate. Usually, with everything else being equal, a PEG ratio lower than one signifies an undervalued stock. Shell’s PEG ratio stands at 0.24, below the average of 0.33 in its peer group, which comprises nine integrated energy companies.

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Peers’ PEG ratios

In comparison, ExxonMobil’s (XOM) PEG ratio of 0.48 is higher than the peer average. PetroChina (PTR) and Total (TOT) also have higher PEG ratios, of 0.68 and 0.59, respectively. Contrarily, Chevron’s (CVX) and BP’s ratios are lower, standing at 0.15 and 0.16, respectively. If you’re seeking exposure to integrated energy stocks, you could consider the Vanguard Energy ETF (VDE), which has a ~37% exposure to integrated energy sector stocks.


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