Royal Dutch Shell PLC (A) (RDS.A) Buy, Sell…

Royal Dutch Shell PLC (A) (RDS.A)

51.05

-0.00 (0.00%)

as of Jan 28, 2022, 11:00:04 pm Market Open.

117 watching

COMMENT

Not expensive and a good dividend. But like many oil companies, they've had to restructure after the oil price collapse. They made a huge purchase of British Gas and took on a lot of debt. That said, RDS can maintain its dividend. They can get good cash flow out of some of their assets in Brazil and Australia. Some of their offshore assets are working out and they can grow--but there are a lot of bumps in the road ahead.

TOP PICK

Pays a 6.7% yield. It's international and integrated, not in Alberta where the oil is trapped without pipelines. They're bullish in LNG. They're buying back stock. There may be a small dividend increase this year. Balance sheet is much better. This is a play on oil prices that he expects will rise. They've paid down debt to their lowest level. (Analysts’ price target is $78.75)

BUY

A long-term hold? A good company though he prefers a peer. He'd buy this at current levels.

BUY

Dividend over 5%, covered by free cash flow, they make money at $50 oil. Investing in renewables. Well run company over the last 100 years, a low cost producer. Would fit into any portfolio. Less sensitive to oil prices because of other businesses.

BUY

It’s had a selloff. He’d be a buyer now, the sector’s starting to simmer down a bit. It’s cheap here, back to 2010-11 levels.

RISKY

Trying to build a base around $60-61. There's safety in some energy names. OPEC oil cuts could be a tailwind into the low-$80's.

BUY

Bought it around the 50 dollar range. The issue with the European oil is that they reduced their capex strengthening their balance sheets. Moving forward they will have strong cash flows.

BUY

If you want to play Canadian oil short-term, look at a company with Brent oil exposure, not Canadian where companies suffer oil discounts on the market. That said, look at Vermillion or Royal Dutch Shell.

COMMENT

He prefers BP which has better upside. RDS though has a nice cash flow and did a great job repositioned the company on the downstream side. Has one of the lowest-cost asset bases. Pays over a 5% dividend. The LNG project in BC announced today will impact RDS who are one of the investors/partners, but there's a real risk of huge cost overruns.

COMMENT

He’s not a huge commodities fan, but he does own Royal Dutch Shell, which is a global expert in putting together large projects like LNG Canada. It is a long-term player. The fact that a skilled, major global player is driving LNG Canada is one of the important causes for optimism for the project. Has a history of being one of the least indebted oil and gas companies. They have also avoided the types of accidents that have plagued other oil companies. Yield 5.4%.

HOLD

The dividend is safe and the balance sheet is in good shape. He would suggest one to continue holding it.

DON'T BUY

Would this be a defensive position in the portfolio? Not sure if this is a defensive stock. He doesn’t own any non-Canadian oil company because there are many good ones in Canada. He prefers Canadian companies and consumer staple companies for a defensive position.

HOLD

If you are looking for a dividend and some exposure to oil it is a good hold. If you believe WTI could get to $100 next year (like he thinks it could), there are better opportunities. He thinks there are tariff issues that may be delaying their announcement for a west coast LNG facility. WestJet has begun flying directly into the Kitimat region, which he sees as a positive sign. Yield 5.5%.

HOLD

This company is very well run with an A+ credit rating. They are profitable at $50 oil and the refinery business is profitable. It still is a commodity based company so there is risk.

DON'T BUY

A play on oil. It's not his top pick in international oil. Oil itself is overbought--the range will be $45-65. Buying this now risks a downside going into late-2018.

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Royal Dutch Shell PLC (A) (RDS.A)