Royal Dutch Shell (RDS.A) vs. Noble Energy (NYSE:NBL) Head to Head Survey

Noble Energy (NYSE:NBL) and Royal Dutch Shell (NYSE:RDS.A) 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 earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Institutional and Insider Ownership

97.7% of Noble Energy shares are held by institutional investors. Comparatively, 5.9% of Royal Dutch Shell shares are held by institutional investors. 2.0% of Noble Energy shares are held by insiders. Comparatively, 1.0% of Royal Dutch Shell shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Noble Energy has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Royal Dutch Shell has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500.

Valuation & Earnings

This table compares Noble Energy and Royal Dutch Shell’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noble Energy $4.26 billion 3.60 -$1.12 billion $0.31 102.23
Royal Dutch Shell $305.18 billion 0.93 $12.98 billion $3.84 17.80

Royal Dutch Shell has higher revenue and earnings than Noble Energy. Royal Dutch Shell is trading at a lower price-to-earnings ratio than Noble Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Noble Energy pays an annual dividend of $0.44 per share and has a dividend yield of 1.4%. Royal Dutch Shell pays an annual dividend of $3.20 per share and has a dividend yield of 4.7%. Noble Energy pays out 141.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Royal Dutch Shell pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Royal Dutch Shell is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings and target prices for Noble Energy and Royal Dutch Shell, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noble Energy 1 9 19 0 2.62
Royal Dutch Shell 0 6 9 0 2.60

Noble Energy currently has a consensus price target of $41.80, suggesting a potential upside of 31.90%. Royal Dutch Shell has a consensus price target of $82.22, suggesting a potential upside of 20.29%. Given Noble Energy’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Noble Energy is more favorable than Royal Dutch Shell.

Profitability

This table compares Noble Energy and Royal Dutch Shell’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noble Energy 19.01% 2.89% 1.43%
Royal Dutch Shell 5.64% 9.22% 4.50%

Noble Energy Company Profile

Noble Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids worldwide. It owns, operates, develops, and acquires domestic midstream infrastructure assets in the DJ and Delaware Basins. It principal projects are primarily located in the US unconventional basins and various global offshore conventional basins. As of December 31, 2017, the company had approximately 1,965 million barrels oil equivalent of total proved reserves. Noble Energy, Inc. was founded in 1932 and is headquartered in Houston, Texas.

Royal Dutch Shell 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.

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