Is Shell Oil (RDS.A) a Great Value Stock Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Shell Oil (RDS.A) is a stock many investors are watching right now. RDS.A is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 7.84, while its industry has an average P/E of 9.48. Over the past year, RDS.A's Forward P/E has been as high as 15.91 and as low as 7.05, with a median of 10.08.
Investors should also recognize that RDS.A has a P/B ratio of 1.01. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.06. Within the past 52 weeks, RDS.A's P/B has been as high as 1.09 and as low as 0.56, with a median of 0.92.
Finally, our model also underscores that RDS.A has a P/CF ratio of 4.68. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 6.65. Over the past 52 weeks, RDS.A's P/CF has been as high as 5.61 and as low as 2.50, with a median of 4.33.
These are just a handful of the figures considered in Shell Oil's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RDS.A is an impressive value stock right now.
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