You are here: Home - Investing - Experienced Investor - News -

Stock of the week: Royal Dutch Shell

Written by:
Graham Spooner, investment research analyst at The Share Centre, picks Royal Dutch Shell as stock of the week.

It appears that Royal Dutch Shell is exploring a future beyond oil with group’s moves to buy ‘NewMotion’, a Netherlands based company, which owns 30,000 electric-vehicle charging points across Western Europe. Shell told the market that this move will complement the company’s existing roll-out of charging stations and there were no plans at this stage to integrate the two.

Shell is known for finding and refining oil, and is the largest listed company in the UK. In recent years the company has been going through some major restructuring programs, which should lead to cost efficiencies, increased production capacity and higher cash flows. However, interested investors will know that the recent lower oil price environment has led the company to rein back on major investment programs.

It is reassuring, however, that Shell’s first half 2017 profits jumped to just over $5bn versus the $1bn in the first half of 2016. It showed that recent trends of better average oil prices, better operational performance, significantly reduced operating expenses and stronger conditions in the chemicals and refining sector have continued.

The oil price trending higher since June and potential for further restructuring benefits and new production sites in 2018, could all help restore market confidence. Moreover, the income is attractive but investors should be wary that any fall in the oil price could once again raise questions about the company’s ability to maintain its dividend.

We continue to recommend Royal Dutch Shell as a ‘buy’ for investors seeking income and willing to accept a low to medium level of risk.

Related Posts

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week