This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Fear Factor and Royal Dutch Shell

The generous dividend payout represents a payout ratio to the company's earnings of only 34%. RDS has over $470 billion in revenue and, as of the most recent quarter, had total cash of almost $19 billion. It has assets in 44 countries and it is keeping up with the trends and demands of the world's energy needs.

Royal Dutch Shell is one of the five biggest producers of oil in the world, but it's becoming more focused on natural gas. The plan is to convert the natural gas into clean-burning diesel to sell to countries that want a reliable, affordable and more environmentally-friendly form of energy.

Ironically, on Friday Royal Dutch Shell said it signed a 50-year profit-sharing deal with the government of Ukraine to explore and drill for natural gas in shale rock formations in the east of the country using the process widely known as fracking, according to an Associated Press story.

The report adds: "Ukraine's Energy Minister Eduard Stavitsky said investment in the project may reach $10 billion. Shell spokeswoman Julia Dudley Friday sent a joint statement issued by Shell and Ukraine's state-owned Nadra Yuzivska LLC stating each will have a 50% interest."

If investors are letting fear of buying the shares of RDS at current levels stop them, that could be overcome by placing a reasonable stealth trailing stop alert below the price paid, thus having an exit strategy that will limit the amount of downside risk.

Based on Shell's last earnings figures, the stock is selling with a PE ratio slightly above 8 and a trailing-twelve-month price-to-sales (P/S) ratio of only 0.48. The company will announce its latest quarterly earnings numbers on Thursday.

The report will be for the fiscal quarter that ended in December. According to Zacks Investment Research, based on just one analyst's estimate, the EPS forecast for the quarter is $2. The reported EPS for the same quarter last year was $1.55, so this would represent a 29% EPS increase. That doesn't sound like anything to be fearful about.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
RDS.A $56.93 0.00%
RDS.B $57.30 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs