Home Stock list Royal Dutch Shell Stock is one of Barron’s top picks for 2022

Royal Dutch Shell Stock is one of Barron’s top picks for 2022

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This article is an excerpt from Barron’s 10 Favorite Stocks for 2022. To see the full list, click here.

Energy supplies could be tight and prices high for years to come.


Royal Dutch Shell

(ticker: RDS.B) is positioned as one of the main energy operations in the world. It trades at a significant discount compared to its American peers,


Exxon Mobil

(XOM) and


Chevron

(CLC).

U.S.-listed Shell shares are trading around $ 43, just seven times projected earnings in 2022, compared to a price-to-earnings ratio of 11 for Exxon and 12 for Chevron. Shell gives 3.9%, less than Exxon or Chevron. Shell, however, has a conservative payout ratio of around 30%, after a sharp drop in dividends in 2020.

Shell is “one of the cheapest large-cap stocks in the world,” wrote activist investor Dan Loeb of Third Point, who took a stake.

Its best business is perhaps the largest liquefied natural gas operations in the world, which only require modest annual capital expenditures.

Loeb’s push for a Shell teardown appears to be going a long way, but it’s possible the company will go public with part of the world’s largest gas station network.

Bernstein analyst Oswald Clint praised the energy giant’s recent move to simplify its corporate structure by domiciling in the UK and consolidating its two share classes into one. Clint sees the company’s share buybacks ramp up in 2022 and has a price target of $ 63 on U.S. certificates of deposit.

Shell’s discount to its US rivals reflects intense pressure in Europe to scale back its oil and gas operations. This remains a risk, but Shell remains attached to its core business.

Company / Teletypewriter Recent price Modification of the current fiscal year 2021E EPS 2022E BPA 2022E P / E Dividend yield Market value (bill)
Amazon.com/AMZN $ 3,377.42 4% $ 41.11 $ 51.37 65.7 Nothing $ 1,713
AT&T / T 23.71 -18 3.38 3.17 7.5 8.8% 169
Berkshire Hathaway / BRK.A 454,550.00 31 17,466.30 18,928.50 24.0 Nothing 673
General Motors / GM 58.39 40 6.73 6.93 8.4 Nothing 85
Hertz Global Holdings / HTZ 21.01 -22 * 4.02 2.55 8.2 Nothing ten
IBM / IBM 125.93 5 10.05 11.04 11.4 5.2 113
Johnson & Johnson / JNJ 173.01 ten 9.83 10.38 16.7 2.5 455
Nordstrom / JWN ** 20.05 -36 1.27 1.99 10.1 Nothing 3
Royal Dutch Shell / RDS.B 42.82 27 4.86 6.19 6.9 3.9 166
Visa / V *** 214.37 -2 5.91A 7.04 30.5 0.7 467

* Since July 1st. ** Estimates for the financial years of January 2022 and January 2023. *** Sept. end of the fiscal year. E = estimate. A = real.

Source: FactSet

Write to Andrew Bary at [email protected]