Noble Energy (NYSE: RDS.A) and Royal Dutch Shell plc ADR Class A (NYSE:RDS.A) are both large-cap oils/energy companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Insider and Institutional Ownership

97.7% of Noble Energy shares are owned by institutional investors. Comparatively, 6.0% of Royal Dutch Shell plc ADR Class A shares are owned by institutional investors. 2.0% of Noble Energy shares are owned by insiders. Comparatively, 1.0% of Royal Dutch Shell plc ADR Class A shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Noble Energy and Royal Dutch Shell plc ADR Class A, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Noble Energy 1 8 19 0 2.64
Royal Dutch Shell plc ADR Class A 0 5 8 0 2.62

Noble Energy presently has a consensus price target of $41.75, suggesting a potential upside of 43.17%. Royal Dutch Shell plc ADR Class A has a consensus price target of $80.78, suggesting a potential upside of 24.81%. Given Noble Energy’s stronger consensus rating and higher possible upside, equities analysts clearly believe Noble Energy is more favorable than Royal Dutch Shell plc ADR Class A.

Dividends

Noble Energy pays an annual dividend of $0.44 per share and has a dividend yield of 1.5%. Royal Dutch Shell plc ADR Class A pays an annual dividend of $3.20 per share and has a dividend yield of 4.9%. Noble Energy pays out 141.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Royal Dutch Shell plc ADR Class A 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. Royal Dutch Shell plc ADR Class A is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Noble Energy has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Royal Dutch Shell plc ADR Class A has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Valuation and Earnings

This table compares Noble Energy and Royal Dutch Shell plc ADR Class A’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Noble Energy $4.26 billion 3.31 -$1.12 billion $0.31 94.06
Royal Dutch Shell plc ADR Class A $305.18 billion 0.88 $12.98 billion $3.84 16.85

Royal Dutch Shell plc ADR Class A has higher revenue and earnings than Noble Energy. Royal Dutch Shell plc ADR Class A is trading at a lower price-to-earnings ratio than Noble Energy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Noble Energy and Royal Dutch Shell plc ADR Class A’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Noble Energy 19.01% 2.89% 1.43%
Royal Dutch Shell plc ADR Class A 5.64% 9.22% 4.50%

Summary

Noble Energy beats Royal Dutch Shell plc ADR Class A on 9 of the 16 factors compared between the two stocks.

Noble Energy Company Profile

Noble Energy, Inc., an independent energy company, engages in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids worldwide. It owns, operates, develops, and acquires domestic midstream infrastructure assets in the DJ and Delaware Basins. It principal projects are primarily located in the US unconventional basins and various global offshore conventional basins. As of December 31, 2017, the company had approximately 1,965 million barrels oil equivalent of total proved reserves. Noble Energy, Inc. was founded in 1932 and is headquartered in Houston, Texas.

Royal Dutch Shell plc ADR Class A 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.

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