Royal Dutch Shell PLC (NYSE: RDS.A) and ENI S.p.A. (NYSE:E) are both large-cap oils/energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Royal Dutch Shell PLC and ENI S.p.A.’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Royal Dutch Shell PLC N/A N/A N/A $1.96 N/A
ENI S.p.A. $74.04 billion 0.77 $13.07 billion $0.41 76.88

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

Institutional & Insider Ownership

6.4% of Royal Dutch Shell PLC shares are held by institutional investors. Comparatively, 1.7% of ENI S.p.A. shares are held by institutional investors. 1.0% of Royal Dutch Shell PLC shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Royal Dutch Shell PLC pays an annual dividend of $3.20 per share. ENI S.p.A. pays an annual dividend of $1.27 per share and has a dividend yield of 4.0%. Royal Dutch Shell PLC pays out 163.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ENI S.p.A. pays out 309.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current recommendations and price targets for Royal Dutch Shell PLC and ENI S.p.A., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Royal Dutch Shell PLC 2 3 11 0 2.56
ENI S.p.A. 4 3 4 0 2.00

Royal Dutch Shell PLC currently has a consensus target price of $57.00, suggesting a potential upside of Infinity. Given Royal Dutch Shell PLC’s stronger consensus rating and higher possible upside, analysts plainly believe Royal Dutch Shell PLC is more favorable than ENI S.p.A..

Profitability

This table compares Royal Dutch Shell PLC and ENI S.p.A.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Royal Dutch Shell PLC 2.91% 6.04% 2.80%
ENI S.p.A. 1.14% 2.23% 0.94%

Risk & Volatility

Royal Dutch Shell PLC has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, ENI S.p.A. has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Summary

Royal Dutch Shell PLC beats ENI S.p.A. on 11 of the 14 factors compared between the two stocks.

About Royal Dutch Shell PLC

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.

About ENI S.p.A.

Eni SpA (Eni) is an Italy-based company engaged in the exploration, development and production of hydrocarbons, in the supply and marketing of gas, liquefied natural gas (LNG) and power, in the refining and marketing of petroleum products, in the production and marketing of basic petrochemicals, plastics and elastomers and in commodity trading. The Company’s segments include Exploration & Production, Gas & Power, and Refining & Marketing. Its Exploration & Production segment engages in oil and natural gas exploration and field development and production, as well as LNG operations in over 40 countries, including Italy, Libya, Egypt, Norway, the United Kingdom, Angola, Congo, Nigeria, the United States, Kazakhstan, Algeria, Australia, Venezuela, Iraq, Ghana and Mozambique. Its Gas & Power segment engages in supply, trading and marketing of gas, LNG and electricity, international gas transport activities and commodity trading and derivatives.

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