Royal Dutch Shell, commonly known as Shell, is a multinational oil and gas company based in the Netherlands. Is Shell stock worth a buy in 2023?
Since its founding in 1907, the company has grown to become one of the largest energy producers in the world.
Let’s take a look at Shell’s history and what it could mean for investors in Shell stock for 2023.
Shell was founded by Marcus Samuel and his sons in London in 1907 as an import-export business focused on selling seashells from Japan to Europe.
However, the company quickly pivoted to become an oil refining and marketing company after discovering large oil reserves in Persia (now Iran).
By 1913, Shell had established itself as one of the largest oil companies in Europe.
In the decades since, Shell has continued to grow and expand into new markets around the world.
Today, the company operates more than 45,000 service stations across over 80 countries worldwide and has interests or investments in:
- Power generation.
- Renewable energy sources such as wind farms and solar power plants.
- Natural gas production and storage infrastructure.
- Petrochemical production facilities.
- And more.
Outlook for 2023
The future looks bright for Shell.
The company is expanding its operations into India with a new refinery project that is expected to be completed this year.
Additionally, Shell plans to make significant investments into renewable energy sources such as wind farms over the next decade. These investments could help position Shell as an industry leader when it comes to sustainable solutions for producing energy.
Energy stocks have been on fire for over a year now. And Shell stock was a beneficiary.
Let’s see if that could continue in 2023 using our proprietary Stock Power Ratings.
Shell Stock Power Ratings
Our system rates stocks from 0 to 100, with 100 being a top-rated stock that is set to 3X the market over the next 12 months.
And Shell stock falls right in the middle of road with a “Neutral” 50 out of 100 score. That means it should perform in line with the rest of the market over the next year.
Oil and gas stocks have been dirt cheap for years now after falling out of investor’s favor. Shell stock rose more than 20% over the last year, and it still boasts one of the cheapest valuations.
Its price-to-earnings ratio is only 4.9. The broader S&P 500 is sitting at 20.1 as I write! That’s why SHEL scores a 97 on our value factor.
But it looks like this stock doesn’t have the market behind it. With poor momentum (14) and middling volatility (48), I wouldn’t expect this stock to rocket higher from here.
And with a market cap north of $200 billion, there needs to be a lot of money flowing into Shell stock to see a big jump. That’s why it scores a 3 out of 100 on size.
Bottom line: With nearly 115 years of experience under its belt and ambitious plans to invest heavily into renewable energy sources such as wind farms, Shell stock could be a stable play for many years to come.
But our Stock Power Ratings shows it may not be a very exciting 2023 for SHEL.