Critical Review: Royal Dutch Shell (RDS.A) & EV Energy Partners (EVEP)
Royal Dutch Shell (NYSE:RDS.A) and EV Energy Partners (NASDAQ:EVEP) are both oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, dividends, analyst recommendations, risk and valuation.
This table compares Royal Dutch Shell and EV Energy Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Royal Dutch Shell||5.64%||9.22%||4.50%|
|EV Energy Partners||-59.46%||-13.03%||-5.88%|
Royal Dutch Shell has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.Comparatively, EV Energy Partners has a beta of 2.86, meaning that its share price is 186% more volatile than the S&P 500.
Royal Dutch Shell pays an annual dividend of $3.20 per share and has a dividend yield of 4.7%. EV Energy Partners does not pay a dividend. Royal Dutch Shell pays out 83.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This is a summary of recent ratings and target prices for Royal Dutch Shell and EV Energy Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Royal Dutch Shell||0||5||8||0||2.62|
|EV Energy Partners||0||0||0||0||N/A|
Royal Dutch Shell currently has a consensus price target of $80.78, indicating a potential upside of 18.49%. Given Royal Dutch Shell’s higher possible upside, equities research analysts clearly believe Royal Dutch Shell is more favorable than EV Energy Partners.
Institutional & Insider Ownership
5.9% of Royal Dutch Shell shares are owned by institutional investors. Comparatively, 8.9% of EV Energy Partners shares are owned by institutional investors. 1.0% of Royal Dutch Shell shares are owned by insiders. Comparatively, 10.2% of EV Energy Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Royal Dutch Shell and EV Energy Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Royal Dutch Shell||$305.18 billion||0.93||$12.98 billion||$3.84||17.75|
|EV Energy Partners||$225.69 million||0.03||-$134.20 million||N/A||N/A|
Royal Dutch Shell has higher revenue and earnings than EV Energy Partners.
Royal Dutch Shell beats EV Energy Partners on 9 of the 13 factors compared between the two stocks.
About Royal Dutch Shell
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.
About EV Energy Partners
EV Energy Partners, L.P. engages in the acquisition, development, and production of oil and natural gas properties in the United States. Its properties are located in the Barnett Shale; the San Juan Basin; the Appalachian Basin; Michigan; Central Texas; the Monroe Field in Northern Louisiana; the Mid?Continent areas in Oklahoma, Texas, Arkansas, Kansas, and Louisiana; and the Permian Basin. As of December 31, 2016, the company had estimated net proved reserves of 12.6 million barrels of oil; 575.3 billion cubic feet of natural gas; and 33.4 million barrels of natural gas liquids. EV Energy GP, L.P. serves as the general partner of EV Energy Partners, L.P. EV Energy Partners, L.P. was founded in 2006 and is based in Houston, Texas. On April 2, 2018, EV Energy Partners, L.P., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
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