Royal Dutch Shell PLC (RDS.B) and PetroChina Company Limited (PTR) Critical Contrast
Royal Dutch Shell PLC (NYSE: RDS.B) and PetroChina Company Limited (NYSE:PTR) are both large-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.
Valuation and Earnings
This table compares Royal Dutch Shell PLC and PetroChina Company Limited’s gross revenue, earnings per share (EPS) 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|
|PetroChina Company Limited||$283.83 billion||0.41||$44.65 billion||$1.60||40.14|
PetroChina Company Limited has higher revenue and earnings than Royal Dutch Shell PLC. Royal Dutch Shell PLC is trading at a lower price-to-earnings ratio than PetroChina Company Limited, indicating that it is currently the more affordable of the two stocks.
Royal Dutch Shell PLC pays an annual dividend of $3.76 per share. PetroChina Company Limited pays an annual dividend of $1.39 per share and has a dividend yield of 2.2%. Royal Dutch Shell PLC pays out 191.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PetroChina Company Limited pays out 86.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PetroChina Company Limited is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Royal Dutch Shell PLC and PetroChina Company Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Royal Dutch Shell PLC||2.93%||6.04%||2.80%|
|PetroChina Company Limited||1.08%||1.78%||1.02%|
Insider & Institutional Ownership
4.9% of Royal Dutch Shell PLC shares are held by institutional investors. Comparatively, 0.2% of PetroChina Company Limited 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Royal Dutch Shell PLC has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, PetroChina Company Limited has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500.
This is a summary of current ratings and target prices for Royal Dutch Shell PLC and PetroChina Company Limited, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Royal Dutch Shell PLC||0||0||0||0||N/A|
|PetroChina Company Limited||0||3||4||0||2.57|
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.
PetroChina Company Limited Company Profile
PetroChina Company Limited is a China-based company principally engaged in the production and distribution of oil and gas. The Company mainly operates through four business segments. The Exploration and Production segment is principally engaged in the exploration, development, production and sales of crude oil and natural gas. The Refining and Chemical Products segment is principally engaged in the refining of crude oil and petroleum products, as well as the production and sales of basic petrochemical products, derivative petrochemical products and other chemical products. The Sales segment is principally engaged in the sales of refined petroleum products. The Natural Gas and Pipeline segment is engaged in the transportation and sales of natural gas, crude oil and refined petroleum products.
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