Royal Dutch Shell has posted a strong start to the year after oil prices rose following an escalation in tensions between Iran and the United States.
Atlantic Capital Markets included Royal Dutch Shell in their top share tips for 2020 which was released in December, outlining a range of companies set for a strong year ahead.
Royal Dutch Shell
Royal Dutch Shell PLC or as its more commonly known “Shell”, is an Anglo-Dutch oil and gas company headquartered in the Netherlands and incorporated in the UK.
They are also one of the worlds supermajors and the third-largest company in the world measured by 2018 revenues and the largest based in Europe.
Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, transport, distribution and marketing, petrochemicals, power generation and trading. It also has renewable energy activities, including biofuels, wind, energy-kite systems and hydrogen.
Shell has operations in over 70 countries, produces around 3.7 Mn barrels of oil equivalent per day and has 44,000 service stations worldwide.
The share price has underperformed over the last 12 months which has left them sitting on a three-year low and poised to start the recovery.
The entire sector had been under siege in 2019 and out of favour due to depressed oil prices and environmental concerns. But this has shifted in early 2020 as oil prices rose and notwithstanding the higher oil price, Shell is far more resilient to negative moves in the price than oil than peers such as BP.
Cash generation is high, debt is managed and with a hefty buyback being announced this should also help underpin the prices.
Atlantic Capital Markets also pointed towards the strong dividend yield of 6% as reason for investors to be excited about Shell as a long term hold.
Having reached highs of 2,630p in July 2019, six months later shares had sunk as low as 2,150p in late December 2018.
Sponsored by Atlantic Capital Markets