Shell Stock Rose as Peers Fell in the Past Month


Jun. 17 2019, Published 9:14 a.m. ET

Shell stock performance

Royal Dutch Shell (RDS.A) stock has posted positive returns in the past month. But other integrated energy stocks have declined in the stated period. Shell stock has risen by 0.3% in the past month since May 13. However, this is lower than the rise in the broad market indicator, the SPDR S&P 500 ETF (SPY). The ETF has risen by 3.0% in the same period. Peers BP (BP), Chevron (CVX), and Total (TOT) have lost 0.7%, 0.8%, and 0.9%, respectively, whereas ExxonMobil (XOM) and Suncor Energy (SU) have lost 2.5% and 2.9%, respectively, in the same period.


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Shell’s moving averages

In the past month, the rise in Shell stock has led to a 0.1% rise in its ten DMA (days moving average). Notably, the gap between Shell’s ten DMA and 30 DMA has narrowed. Shell’s ten DMA, which stood 0.9% below its 30 DMA on May 13, is now 0.2% below its 30 DMA. The lower gap suggests a higher possibility of crossover (of ten DMA above 30 DMA), a technically short-term bullish sign.

So, how does Shell look after its recent rise?

Shell trades at a forward PE of 10.6x, below the peer average of 12.3x. Peer BP (BP) also trades below the peer average at 10.8x. However, ExxonMobil (XOM) and Chevron (CVX) trade above average at 16.1x and 15.1x, respectively.

Shell’s earnings are expected to grow by 8% in 2019, above the peer average of 2%, which could be due to its expanding upstream portfolio and robust downstream asset base. Plus, Shell has been strengthening its financials by executing its strategy. Also, the company’s debt and cash flows have been improving.

Moreover, Shell’s current dividend yield stands at 5.9%, above the peer average of 5.0%. Plus, Shell has announced the fourth tranche of its $25 billion share buyback program.

Overall, Shell stock has risen in the past month, and its moving averages are implying optimism. Thus, the stock looks attractive with higher shareholders returns, a lower valuation, and a positive earnings growth estimate for the current year.


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