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Stock Name Stock Symbol Market Stock Type
Bp Plc BP. London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
-0.40 -0.12% 327.30 16:03:27
Open Price Low Price High Price Close Price Previous Close
320.30 317.65 329.05 327.70
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sinzu: Why going green will boost Shell and BP shares The more the world turns to alternative fuels, the more in-demand gas and oil will become The drive to decarbonise the world will push up the share price of oil and gas firms until at least the end of this decade, analysts claim. As global leaders bash out plans to reduce reliance on fossil fuels at the Cop26 summit in Glasgow, energy firms are reaping the benefits of a global crunch in supply as well as pressure to stop the development of new coal, gas and oil fields. Andrew Bailey, the governor of the Bank of England, said: “As we substitute out of more damaging hydrocarbons, coal obviously being a case in point, we will probably see increased demand for some other hydrocarbons [ie gas] during the transition.” The supply of fossil fuels is set to peak in about 2025 thanks to international agreements, but demand is not expected to fall until at least the end of this decade, according to the investment bank Morgan Stanley. The company now expects the price of Brent crude to trade at $95 a barrel by January, up from a previous estimate of $77.50. Last week it was trading at about $83. Martijn Rats, a commodities expert at Morgan Stanley, said: “For the world to decarbonise, both the demand and supply for fossil fuels need to decline, but getting these two things to sync is challenging. On current trends we expect oil and gas demand to peak by the end of this decade, but we expect the peak in supply by 2025. This could support commodity prices, at least until 2030. If you want to slow down fossil fuel production by the end of the decade, you have to take steps to do that now.” Energy firms were severely affected by the pandemic as demand plunged, but supply constraints have been a boon for investors. The MSCI World Energy index, which represents the price of traditional energy firms, is up 48.3 per cent this year, while the Global Alternative Energy index, which tracks the performance of firms involved in renewable energy, is down 1.4 per cent. The FTSE is up about 10 per cent. Georgina Cooper, a co-manager of the Dunedin Income Growth Investment Trust, which includes the French oil and gas firm Total Energies in its top ten holdings, said: “The cash flows and profits of large oil and gas firms are benefiting from higher prices as a recovery in demand for hydrocarbons meets markets that are still somewhat constrained by supply.” BP’s share price is up more than 30 per cent this year, while Royal Dutch Shell has risen 25 per cent. They are both still down about 30 per cent from their pre-pandemic peaks, however. Glencore, the world’s largest exporter of thermal coal, is up more than 40 per cent this year, while Whitehaven Coal, the Australian miner, has risen 48 per cent. Force firms to change Instead of selling their stakes in traditional energy firms, investors seeking a greener bet are being encouraged to participate at annual meetings and vote to sway board decisions. Those invested in publicly listed firms such as BP and Shell can influence their direction. Investors can also vote on the decisions taken by investment trusts — listed companies that hold shares in other firms and in which investors can buy shares. Last week Interactive Investor became the first large investment platform to automatically opt customers into its voting service, meaning they will be invited to participate at annual meetings. Investors are already putting pressure on large oil firms to change direction. The activist hedge fund Third Point, which owns about $750 million of Shell stock, has been calling for it to split, with one part focusing on the traditional energy sector to generate reliable income, and another focusing on renewables. Richard Hunter from Interactive Investor said: “Shell is not in agreement, maintaining that the generation of cash from its oil and gas businesses is required to fund the considerable investment needed in often untested sources of energy.” Laith Khalaf, an analyst at AJ Bell, said: “Whether to invest in oil and gas companies is a personal decision, a little like whether to make the move to an electric car. What the recent petrol pump crisis has highlighted, though, is that many people are still reliant on the likes of BP and Shell to keep their engines running, and it doesn’t make a huge amount of sense to fully divest from these stocks in your portfolio if you are still using their products at the pump.” Environmental, social and corporate governance, or ESG, is the latest buzzword in the investment world as fund managers seek to capitalise on growing demand and market their products with the label. In the first nine months of 2021 a net £26.8 billion was added to ESG funds but £21.2 billion to non-ESG products, according to the analyst Refinitiv. However, definitions for ESG are broad and can include those investing in fossil fuel companies or regimes that few would regard as socially responsible. How do I invest? Large fossil fuel companies, particularly those based in Europe, are investing in more renewable sources of energy, making them attractive for long-term investors, according to Khalaf at AJ Bell. “Some names previously associated with a big carbon footprint have changed their spots and are now at the vanguard of the clean energy transition,” he said. He tips the Danish renewable energy company Orsted, which is favoured by many ESG fund managers. Over the past 12 years the firm has transformed from a coal-guzzling heat and power supplier into a leader in renewable energy. However, the company recently warned of difficult conditions for the sector owing to supply chain hold-ups and rising raw material prices. Its share price is down 31 per cent this year. Khalaf also suggests the UK firm Drax, once the largest coal-fired power station in western Europe. It has reduced its carbon emissions by more than 90 per cent since 2012 and now produces 12 per cent of the UK’s renewable electricity. “These examples show that pollutive energy companies can be part of the solution to climate change in a relatively short time frame, if they put their mind to it,” said Khalaf. The Drax share price is up 42 per cent over a year. Jason Hollands at the wealth manager Tilney likes the Guinness Global Energy fund, which is down 16 per cent over three years compared with a sector average rise of 37.7 per cent. It charges 0.99 per cent a year on top of platform and adviser charges. Guinness Global Energy was one of the top-selling funds last month, according to Interactive Investor. For those interested in renewables, analysts at Interactive Investor tip the Gravis Clean Energy Income fund, which invests in firms supplying and storing clean energy. It is up 75 per cent over three years compared with a sector average of 28.3 per cent. It charges 0.81 per cent a year on top of platform fees. If you use an adviser, expect to pay about 0.5 per cent a year more. For a lower-cost approach, it suggests iShares Global Clean Energy exchange traded fund. It costs 0.65 per cent a year on top of platform and adviser charges.
dorlcote: Planit - An article in the Telegraph the other day made a similar point hTTps://www.telegraph.co.uk/investing/shares/questor-rise-ethical-investing-esg-make-bp-shares-attractive/ Questor: rise of ‘ethical’ investing and ESG only make BP shares more attractive Questor share tip: the environmental movement is gaining speed, breaking down free-market workings of supply and demand By Richard Evans 31 October 2021 The irony about “ethical” investing is that its advocates will end up making shareholders in oil companies richer. We are already seeing at the petrol pumps what happens when resurgent demand meets constrained supply. What is less obvious is how the rise of “ESG”, the in-vogue expression for ethical investing that takes in environmental, social and governance concerns, will entrench those shortages for, in all probability, the remainder of fossil fuels’ involvement in meeting our energy needs. Why? Because the influence of ESG, which has multiplied in the past couple of years and seems certain to grow stronger still, is breaking down the normal free-market workings of supply and demand. In the past, the price mechanism worked its magic to keep supply and demand broadly in balance over the course of a cycle. If a growing economy led to more demand for oil and gas, the immediate effect was for prices to rise. High prices encouraged investment in new sources of supply but the industry often overreacted, so that shortages turned into gluts and prices fell. Investment in new supply then dried up, to sow the seeds of the next shortage. These dynamics played out with a time lag, as it takes years for a new oil well to start to produce. But now the natural urge on the part of the fossil fuel companies to invest in new capacity when prices are high is being throttled by the clamour for “responsible” investing. As more and more fund managers espouse ESG principles, the pool of capital available to support investment in new oil and gas supply is shrinking. It’s not just that the fossil fuel giants would struggle to raise new funds in the City or on Wall Street: the ESG movement also puts pressure on them not to reinvest their own profits in new exploration. Capitalism is dying in the oil and gas sector. Meanwhile the world needs energy and, despite the rapid rise of greener sources, about 80pc still comes from fossil fuels. The inability of the companies that produce them to increase supply – or perhaps even to maintain it, in view of the fact that wells have a finite life – will guarantee that prices remain high and that these companies will make enormous profits. Were the normal market-driven cycle of investment and retrenchment able to continue, we would expect alternating periods of feast and famine. Thanks to ESG’s effective veto on new exploration, we can look forward to uninterrupted feast. What will the oil companies do with all this money they will make? Some will be used to reduce their debts, some to invest in green sources of energy so that they have a future even when, in several decades’ time, we finally have no further use for fossil fuels. But there will still be a lot of cash to give to shareholders in the form of dividends. Shell disappointed shareholders last week when it reported profits below expectations but this is a short-term blip in a story that will play out over many years. Questor recently rated its shares a hold. BP reports third-quarter results on Tuesday. Charles Heenan, of Kennox Asset Management, says: “As risk-focused investors we are drawn to the energy majors. There is strength in their diversification. We believe BP has an excellent portfolio, enormously attractive at this time, diversified across a proper range of assets: gas and oil, both ‘upstream’ [production] and ‘downstream’ [refining], selling to the consumer in its own petrol stations, and now renewables. “The company is generating huge amounts of cash flow, something we don’t see stopping for a while.” Partly because so many institutional investors now turn up their noses, BP’s shares trade at just 8.2 times predicted earnings for the current year, while they yield a predicted 4.4pc. These figures are far from pricing in the bounty in store. We rated the shares a buy in August at 298p and although they now stand 17.5pc higher at 350.2p we reiterate that advice today. Questor says: buy Ticker: BP Share price at close: 350.2p
sarkasm: Oil Majors Won’t Come Running to Help World Facing Energy Crunch Kevin Crowley and Laura Hurst, Bloomberg News (Bloomberg) -- The world’s biggest energy companies are producing the most cash in years, but don’t expect them to spend it on bringing on fresh supplies of oil and natural gas to combat shortages in Europe and China this winter. Exxon Mobil Corp., Royal Dutch Shell Plc and Chevron Corp. confirmed this week that, for the most part, they’ll spend their windfall profits on share buybacks and dividends. Capital expenditures will rise next year, but the increases come off 2021’s exceptionally low base and within frameworks established before the recent surge in fossil-fuel prices. It’s a step-change from previous energy rallies, such the early 2010s when emerging U.S. shale plays and fears over fossil fuel shortages prompted a massive upswing in capital spending. That boom ended painfully for the industry, with overproduction and a lack of cost control. This time around, Big Oil appears content to take the cash and hand it over to shareholders, who are both weary of poor returns over the last decade and concerned about the companies’ significant climate risk. “It’s not so long ago they got creamed by prices collapses so it’s not surprising they’re a bit gun shy on capex,” said Stewart Glickman, a New York-based analyst at CFRA Research. “It’s almost like they’re stuck between two extreme populations — the ESG crowd and cash-flow hungry shareholders.” Producers can satisfy both groups by simply not ramping up spending on fossil fuels. But that’s bad portent for consumers crying out for more supply. Europe and Asia are currently competing for natural gas, sending prices to record levels, while the U.S. and India have asked OPEC+ to produce more oil. China has called on state-owned companies to secure energy supplies at any cost. Chevron is perhaps the best example of a company turning away from the punch bowl. The California-based oil giant generated the most free cash flow in its 142-year history during the third quarter but intends to keep capital spending 20% below pre-Covid levels next year while increasing share buybacks. Its 2022 capital budget will come in at the low-end of its $15 billion to $17 billion range, according to Chief Financial Officer Pierre Breber, some 60% below 2014 levels. Low-Carbon Pivot “Over time the vast majority of the excess cash will return to shareholders in the form of higher dividends and the buyback,” he said Friday on a conference call with analysts. Even Exxon, until last year the poster child for doubling down on fossil fuels, is now more reticent with its cash. The Texas-based energy giant announced a surprise stock buyback Friday and locked in long-term annual spending in the low $20 billion range, a cut of more than 30% from before the pandemic. Furthermore, almost 15% of Exxon’s budget will go toward low-carbon investments, a significant departure from its previous strategy and just months after activist investor Engine No. 1 persuaded investors to replace a quarter of its board. The clean energy spending provides “optionality and builds resiliency into our plans,” CEO Darren Woods said. Shell -- which faces pressure from an activist investor as well after Dan Loeb’s Third Point LLC revealed this week it took a stake in the company -- is even more reluctant about spending on its traditional oil business. Less than half of its capital spending will go toward oil, with the bulk directed at gas, renewables and power. “We will not double down on fossil fuels,” Shell CEO Ben Van Beurden said this week.
waldron: FWIW THE MOTELY FOOL What made the BP share price rise? Over the past 12 months, the BP share price has jumped from around 220p to 344p. However, most of the growth happened this month, with the share price still under 300p at the start of September. The first thing that strikes me is how well-placed BP is to benefit from increased demand for petrol. This is thanks to its strong presence in the UK petrol market. I bet a lot of people have been thinking the same thing. This led me to wonder if the BP share price jump might be down to the Keynesian Beauty Contest theory of the stock market. Celebrated economist Keynes came up with an analogy for the stock market based on a contest run by a London newspaper. In this contest, entrants were asked to choose the six most beautiful women from a set of 100. Those that chose the most popular faces would then be entered into a raffle to win a prize. Keynes argued that the skill was not actually in picking the most beautiful face, but rather picking the face that most people thought the most beautiful. His theory was that investors can behave in a similar way. They choose stocks based not on fundamentals, but on predictions of what they think the market will do anyway. Long queues at petrol pumps may persuade investors more people will want BP shares. So could this be enough to make the BP share price jump again? I’m not so sure. First, fundamentals matter to me. I’m very aware that BP operates on a bigger scale than just the UK and is about more than retail petrol sales. So giving UK petrol problems too much weighting could be a mistake. In the longer term, BP remains vulnerable to changes in oil prices. Yes, oil prices have just broken the $80 a dollar mark for the first time in almost two years. But prices fell to just over $20 a barrel during lockdown. This hit BP’s profits hard, and it posted a second quarter loss of $16,848m last year. Q2 results look brighter this year and it.s hoping an oil price above $60 a barrel will allow it to deliver a dividend of 4% per share. Will oil prices stay high? If the recovery continues at pace, I think they could; but this remains a considerable risk. So where does that leave me as a potential buyer? Overall, I wonder if I’ve missed the boat. The BP share price may jump again in the short term, but I’m not convinced long term. And I’m reluctant to get involved in a Keynesian beauty contest!
waldron: Https://www.marketscreener.com/quote/stock/BP-PLC-9590188/news/Fuel-crisis-City-traders-circle-BP-and-Shell-as-they-take-positions-for-more-price-hikes-36591441/ Fuel crisis: City traders circle BP and Shell as they take positions for more price hikes 10/04/2021 | 08:31am BST Investors are not banking on a swift resolution to the UK fuel crisis against a backdrop of continuing queues on forecourts and the Army being put on standby to help with deliveries, according to data shared with City A.M. this morning. Analysis of investor movements with regards to BP, Royal Shell and Glencore shows that investors are increasingly bullish on these stocks as they expect prices will rise further, following their recent strong performance that was partly driven by the UK fuel crisis. Soaring natural gas prices and concerns over possible winter shortages have motivated a number of investors to position accordingly, trading house GraniteShares shared with City A.M.. Figures for the past week show Royal Dutch Shell has seen the volume of funds traded rise by 19 per cent, while the volume traded in Glencore is up 45 per cent. “The oil giants and Glencore have benefited recently from optimism about rising commodities prices and the UK fuel crisis,” said William Rhind, founder and CEO at GraniteShares. “It would appear that investors don’t see an end to that any time soon and are positioning themselves for higher prices,” he said. The post Fuel crisis: City traders circle BP and Shell as they take positions for more price hikes appeared first on CityAM.
planit2: I just think funds that have been in BP/Shell for the last 30 years are now moving out. There are 3 groups 1) these are the ESG funds, they were set up that way and are available to investors who want to invest in ESG. No problem here (and this is huge business). 2) there are other funds who have wanted to put an ESG label on their fund to attract more money and seem like they are good people. Slightly more dodgy as some passive investors will not realise their fund is not looking to maximise return any more. 3)These pensions/funds are doing it so they can prove to people they are 'responsible', they know best that all their investors should be happy in the knowledge that their pension providers are not investing in 'terrible' companies without their knowledge. This is the most dodgy as the investors have no clue on how this will affect their retirement income. Example the government NEST pension scheme decided to sell oils companies in November, doing over the pension holders without any blowback. The more 'unacceptable' it is to invest in these companies the longer it will go on. Imagine if the government made it illegal for pension companies to own oil companies. Also the oil companies are reducing debt as there is a risk they will not be able to borrow money in the future. There is great pressure on the banks not to lend to oil projects to the point where African countries are complaining as they need the energy. Giving China a free pass into all these countries is the height of stupidity. Since I don't expect the ESG insanity to change any time soon, these companies will trade at a discount to fair value for a long time. With the buybacks and reinvestment the discount just gets more concentrated which will result in a bigger return going forwards. It's not really value investing where you expect a rerate, it needs a bit more faith and patience. I like BP, the share price is half what it should be so 4% of buybacks is worth 8% in the future. On top of that they have stripped out all wastage and exploration that takes a decade to be realised. This will result in higher profits for a certain price of oil. They have divested from less profitable ventures meaning their costs per barrel are reducing I see the price of oil only going up, in the next year because OPEC+ have control and in 2-3 because of a supply shortage (this squeeze is getting worse every month by stupid policies and ESG pressure). Lastly I like the plan to transform into green, they can use their huge cashflow to buy ventures now which will be worth a lot in the future* * This point is important. I could invest in ESG to be a 'good citizen' but money is pouring into ESG at the moment so assets are completely over-priced, it's like the dot-com bubble and most ESG tech will be worth nothing in the future. But I see investing in BP as a much better proposition. Firstly they are extremely knowledgeable, they have got money to employ the best minds when it comes to renewable/ low carbon energy including hydrogen. They are investing generated money into these ventures so we are consistently getting new green investment by doing nothing. Secondly there is the constraint, they can't invest in any old low carbon tech, they can only invest in real projects that will generate significant power, they have to do this to get their low carbon % down as they have promised (and which Shell have been forced by the courts). Since their power production is going to be higher than any other ESG company, they will also be able to leverage any patented technology more than others and can therefore outbid. When I add this all together, I see BP as being one of the biggest energy generators on the planet in the 2030's. When other investors start to view BP as more green and having a future, the price could accelerate very quickly (but we are talking 3-8 years away). I am open for anyone telling me I have got it all wrong but the above makes me very bullish. I also see the price of electricity going up 2-4 times over the next 5 years (inflation + extra demand) which will also help payback on any early renewables investment.
spacecake: Some say "Whats going on here", well the fossil fuel groups have been stepping up their lobbying of the SEC over carbon and climate reporting, this includes the US division of BP according to the FT. hTTps://www.ft.com/content/cd247b42-8119-4681-afb2-2d89e109ba08 It's clear companies would be happy with business as usual but investors are actually asking the SEC for more regulation not less. As long as the BP board are in 'resistance mode' to fully tackle the climate issue at speed then investors will sit on their hands and keep their cash away from big oil. Handing out big dividends and buybacks are not the answer big investors are looking for.
adrian j boris: masterinvestor Can the Shell and BP share prices recover after underperforming the FTSE 100? By Robert Stephens, CFA 10 June 2021 2 mins. to read Robert Stephens, CFA, discusses the outlook for the UK’s two oil majors after a disappointing year. The performances of BP (LON: BP) and Shell (LON: RDSB) have been hugely disappointing over the past year. While the FTSE 100 index has surged by around 10%, the share prices of the two oil and gas majors are down by 12% apiece. A key reason for their underperformance of the index could be concerns about their reliance on fossil fuels. Covid-19 appears to have accelerated the trend towards cleaner forms of energy, as well as increasing the popularity of ESG investing. Oil and gas prospects However, the prospects for the oil and gas industry may be more positive than the share price performances of Shell and BP would suggest. Certainly, demand for oil and gas will decline over the coming decades, as major economies, including the UK, target net-zero emission targets. However, in the short run, the outlook for oil and gas could be encouraging for two reasons. First, the global economy is widely forecast to deliver strong growth in 2021 and 2022. According to the IMF, it is expected to grow by 6% this year and 4.4% next year. Historically, oil prices have been positively impacted by buoyant economic performance. The asset may even become more popular among investors who are searching for an inflation hedge should economic growth cause a rapid rise in the price level. Second, the adoption of cleaner forms of energy is likely to be an evolutionary process, rather than a revolution. There is no guarantee that current targets, which are ambitious in many cases, will ultimately be met. Indeed, the International Energy Agency (IEA) forecasts that demand for oil will be 4.4% higher in 2026 than it was prior to the pandemic. Alongside this, the shift within the energy sector from fossil fuel to low-carbon assets may mean that the supply of oil is somewhat limited. This could have a positive impact on its price. Attractive valuations Shell and BP have ambitious strategies to pivot towards low-carbon assets over the long run. In reality, the cost, returns and ultimate success of those plans is likely to remain a known unknown for a prolonged period. They could provide investors with high and sustainable returns over coming decades. Or they may leave both companies crippled with high levels of debt and asset bases that offer lower returns than have been previously available via fossil fuel assets. In this latter scenario, the ability of the two companies to deliver dividends or share price growth could be severely limited. However, the valuations of the two stocks suggest that investors are factoring in a period of financial difficulty and risk as they embark on their strategy shift. Shell has a price-to-book ratio of 0.9 and a dividend yield of 3.5%, while BP trades at just a 20% premium to net asset value and offers a dividend yield of 4.8%. These figures suggest that the two stocks offer wide margins of safety that may not reflect their potential to deliver improved financial performance should the oil price rise in the likely global economic recovery. They may also price in a failure to pivot towards low-carbon assets that does not materialise. As such, they could offer good value for money on a risk/reward basis relative to other FTSE 100 stocks in the current bull market.
the grumpy old men: Is Royal Dutch Shell Stock a Buy? Shell had a solid plan for the future. Or at least it did until things got a little more complicated. What should investors do now? Reuben Gregg Brewer (TMFReubenGBrewer) Jun 4, 2021 at 11:25AM Author Bio Royal Dutch Shell (NYSE:RDS.B) is one of the largest integrated energy companies on Earth. That has put it in the crosshairs of environmentalists looking to take on global warming. The company has started to do something about this issue, but it may not be enough to satisfy detractors. That could make life much more difficult for Shell and its shareholders. The big change Shell made the very difficult decision in 2020 to cut its dividend by a huge 65%. There were two reasons why the giant energy company took this step. First, drilling for oil requires a lot of capital investment, and at the time weak oil prices were making it difficult to fund spending needs. Second, the company announced plans to alter the makeup of its business, shifting toward growth in cleaner energy businesses and reducing its emphasis on oil. A smiling person in front of wind turbines. Image source: Getty Images. That second announcement was notable, as it meant that Shell had heard what investors, governments, and environmentalists were saying about reducing carbon and it was taking action. Some of its peers, notably Chevron and ExxonMobil were, and for the most part still are, dragging their feet on this front. Shell's goal is to get to net zero carbon by 2050, with interim goals of a 20% reduction by 2030 and a 45% reduction by 2035. There are a lot of moving parts to this plan, but it entails reducing oil production, increasing natural gas exposure, and ramping up investment in renewable energy. Shell is not new to the clean energy space either, so it has some expertise to build off of. The goals seem reasonable, but there's one key thing investors have to remember -- the oil business, though shrinking, is helping to fund the transition to a cleaner future. A wrench in the gears Everything seemed lined up for Shell. It had even gotten back to increasing its dividend, now having raised it twice since the cut. That was meant as a sign to investors that the company was financially strong and could be trusted to address clean energy concerns and maintain a growing dividend over time. Based on shareholder proxy voting, investors appeared pleased with the direction the company was heading. Then Shell lost a court case in Europe around its environmental impact. TOT Dividend Per Share (Quarterly) Chart TOT Dividend Per Share (Quarterly) data by YCharts The big takeaway from the case is that Shell was told to increase the pace of its clean energy transition. The court mandated target for carbon emission reduction was 45% by 2030. That pushes forward the 2035 goal by five years, but means more than doubling the carbon reduction originally planned for 2030. This is a massive change. The company responded by outlining the steps it has taken so far and plans to take in the future. And by saying it will appeal the decision. That is the logical step for Shell, but investors need to consider what happens if it loses this fight. Most notably, it will likely have to divest more oil assets to meet the court's mandate. That means less revenue to support the shift toward clean energy. In turn, this will probably lead to increased use of the balance sheet to fund the transition. That is not an ideal solution. What to do about it? At this point, nothing is likely to happen in the near term. However, investors looking for a long-term energy investment might want to step back here and rethink how they go about putting their money to work. This isn't to suggest that Shell is a bad company, only that the court loss raises the risks for this energy company in an unpredictable way. The best alternative right now is likely Total (NYSE:TOT), which is going down a similar clean energy path, has maintained its dividend, and has shareholder support for its transition. Alternatively there is BP, but the company's 2020 dividend cut and high leverage compared to peers are issues that some may, justifiably, find concerning. That said, be prepared, if Shell does end up losing this fight, it is likely that other energy names will find themselves facing similar problems down the line. Should you invest $1,000 in Royal Dutch Shell plc right now? Before you consider Royal Dutch Shell plc, you'll want to hear this. Our award-winning analyst team just revealed what they believe are the 10 best stocks for investors to buy right now... and Royal Dutch Shell plc wasn't one of them. The online investing service they've run for nearly two decades, Motley Fool Stock Advisor, has beaten the stock market by over 4X.* And right now, they think there are 10 stocks that are better buys. See the 10 stocks *Stock Advisor returns as of May 11, 2021 This article represents the opinion of the writer, who may disagree with the “official̶1; recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. Reuben Gregg Brewer owns shares of Total SA. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
waldron: interactive investor Services Pensions Research News Join Us Shell and BP shares: what the City really thinks by Graeme Evans from interactive investor | 21st April 2021 15:22 Share on: With oil majors still in recovery mode, these experts just updated their expectations. Shell oil GettyImages It's been almost a year since pandemic-hit Royal Dutch Shell (LSE:RDSB) dealt a severe blow to income investors and pension funds by cutting its dividend for the first time since the war. Last April's 66% reduction took the first-quarter payment down to 16 cents per share, although by late October the oil giant's prodigious ability to generate cash had already resulted in the resumption of its progressive dividend policy. Now, a City bank has made Royal Dutch Shell its top pick in the European oil sector by modelling a 2022 restart to share buybacks that implies a total shareholder yield of 10.7%. Stocks that made you a fortune in the 2020-21 tax year ISA early bird investors almost twice as likely to be ISA millionaires Open an ISA with interactive investor. Simply click here to find out how. Deutsche Bank's upbeat assessment also forecasts 37% upside for Shell's shares, whereas its research analyst James Hubbard sees higher risk and much less momentum at BP (LSE:BP.). He said in a note published today: “When Shell cut its dividend in 2020 it was a shock for many, but the silver lining is that it saves Shell about $10 billion per annum. “This contributes to our forecast for its net debt to swiftly fall to under management's target of $65 billion before the end of 2021 and sets up 2022 to potentially see the restart of a material share buyback.” Royal Dutch Shell B shares, which for tax reasons are more commonly traded in London than the A version, were today 6.2p higher at 1,297p. This compares with a pandemic low of 866p in late October and more than 1,500p seen last month. More positives for Shell Hubbard believes there are other positives beyond the buyback catalyst, including the scale of the energy giant's LNG business (liquified Natural Gas) which ranks second and first respectively in terms of liquefaction capacity and in volumes sold. Natural gas emits between 45% and 55% fewer greenhouse gas emissions and less than one-tenth of the air pollutants than coal when used to generate electricity. Using Deutsche Bank's oil carbon scorecard, Shell's decarbonisation strategy places the company fourth out of eight European-listed names and two spots ahead of BP. Shell's A shares currently trade on a forecast multiple of 8.5 times 2021 earnings, which Deutsche notes is a 35% discount versus the EU oil sector's five-year average. The dividend yield of 3.6% is less impressive versus a sector average of 5.4%, but this jumps to the top of the pile on the assumption that buybacks will restart in earnest next year. The bank's new 1,937p target for Shell A is based on Brent oil averaging $65.4 a barrel over the next two years and implies a price/earnings multiple of 11.5 times, which is still an 11% discount to the sector's five-year average. ii view: Shell confirms big hit from Texas winter storms Your vote counts: get heard at Lloyds Bank, NatWest and BP AGMs ITM Power: a star of the green investor revolution On BP, Deutsche has a price target of 313p and ‘hold’ recommendation. The bank said this partly reflected risks attached to ambitious decarbonisation plans outlined in September. Today's note warns: “Aggressive renewables investments come with risks of potential value destruction via paying what may turn out to be 'full' prices for potentially relatively late entry to some projects.” BP shares were today 1.85p higher at 293.6p.
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