Critical Survey: CENTENNIAL RES (CDEV) & Royal Dutch Shell PLC (RDS.A)
CENTENNIAL RES (NASDAQ: CDEV) and Royal Dutch Shell PLC (NYSE:RDS.A) are both mid-cap oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, dividends, profitability, valuation, institutional ownership and earnings.
This is a summary of current ratings and target prices for CENTENNIAL RES and Royal Dutch Shell PLC, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Royal Dutch Shell PLC||2||3||11||0||2.56|
CENTENNIAL RES currently has a consensus target price of $22.55, suggesting a potential upside of 24.84%. Royal Dutch Shell PLC has a consensus target price of $57.00, suggesting a potential upside of Infinity. Given Royal Dutch Shell PLC’s higher probable upside, analysts clearly believe Royal Dutch Shell PLC is more favorable than CENTENNIAL RES.
Royal Dutch Shell PLC pays an annual dividend of $3.20 per share. CENTENNIAL RES does not pay a dividend. 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.
Institutional & Insider Ownership
90.6% of CENTENNIAL RES shares are held by institutional investors. Comparatively, 6.3% of Royal Dutch Shell PLC shares are held by institutional investors. 44.7% of CENTENNIAL RES shares are held by insiders. Comparatively, 1.0% of Royal Dutch Shell PLC shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares CENTENNIAL RES and Royal Dutch Shell PLC’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|CENTENNIAL RES||$212.53 million||21.81||$133.00 million||N/A||N/A|
|Royal Dutch Shell PLC||N/A||N/A||N/A||$1.96||N/A|
CENTENNIAL RES has higher revenue and earnings than Royal Dutch Shell PLC.
Volatility and Risk
CENTENNIAL RES has a beta of 2.1, indicating that its stock price is 110% more volatile than the S&P 500. Comparatively, Royal Dutch Shell PLC has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.
This table compares CENTENNIAL RES and Royal Dutch Shell PLC’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%|
CENTENNIAL RES beats Royal Dutch Shell PLC on 6 of the 10 factors compared between the two stocks.
CENTENNIAL RES Company Profile
Centennial Resource Development, Inc. is an independent oil and natural gas company. The Company is focused on the development of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin. The Company’s assets are concentrated in the Delaware Basin, a sub-basin of the Permian Basin. Its properties consist of large, contiguous acreage blocks in Reeves, Ward and Pecos counties in West Texas. As of December 31, 2016, the Company held approximately 92% membership interest in Centennial Resource Production, LLC (CRP). As of December 31, 2016, its portfolio included 106 operated producing horizontal wells. The horizontal wells span an area of approximately 45 miles long by 20 miles wide where it had commercial production in five zones: the 3rd Bone Spring Sandstone, Upper Wolfcamp A, Lower Wolfcamp A, Wolfcamp B and Wolfcamp C.
Royal Dutch Shell PLC 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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