Sunday, September 20, 2020

RDS.A stock: Royal Dutch Shell: Unloved But Offering A 25%+ 3-Year CAGR Even Without A Full Recovery

 Here is the article. 

Oil prices have firmed up lately, but Royal Dutch Shell remains unloved, with its share price sliding back towards lows from the negative oil price crisis.

The company's fundamental strength remains solid with a strong financial position and history of dividend coverage, meaning that it can afford to increase its dividends in the future.

Even if the company only reinstates its dividend back to two-thirds of its previous level, investors could still see 25% per annum returns across the next three years.

When running a Monte Carlo Simulation to estimate the intrinsic value for the shares, a very impressive 82% of the results were above the current price, indicating low downside risk.

Following this analysis, I believe that upgrading my rating to very Bullish from Bullish is appropriate.

Think about more about purchase of oil stock again:

Even though oil prices have firmed up lately, the share prices of many large oil and gas companies have continued sliding down towards their lows during the fear of negative oil prices. One such example is the Anglo-Dutch supermajor Royal Dutch Shell (RDS.ARDS.B), which presents investors with another chance at a desirable contrarian dividend investment.

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