RDSB - bargain?

I’m looking at my holding on this today, and in comparison to its peers, looks a good hold.

Its currently trading at 8x 2021 forecast earnings, with its competitors Exxon 14x, and Chevron 16x.

Then again BP is at similar multiples, so is that just a case of the market sentiment preferring US shares to EU/UK, or will we see a correction?

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I think europeans are less likely to want to invest in oil companies and the US investors will favour their own. Also perhaps some uncertainty with the european ones putting more money into new ventures linked to renewables.

I personally am heavy into BP, i had some RSDB last year as well as BP but at that time made decision to move to just BP, and have added HEAVILY. I think both will do well from here but for me currently BP seems to make more money relative to its size and I am happy with the capital allocation between capex and divs/buybacks (Shell looks decent too though).

Quick look on yahoo finance yields these figures (in US$):

TTM profit:
Shell 5.58bn
BP 8.69bn

1H 2021 profit:
Shell 9.09bn
BP 7.79bn

Keep in mind market cap of Shell is much larger than BP.

Would happily be interested to know any things to look at with RDSB as why they might be better than BP from current levels.

I had almost 6% of my portfolio shared between RDSB and HSBC at some point and luckily, I traded out of these positions completely by the end of 2018.

Even in their “good days” RDSB price was rather flat, and what you made was over the good healthy dividends.

I see no reason why this’d change in current climate and sentiment for an upwards trend.

The next winner in energy sector will be someone who invests into nuclear and may be miraculously solve Thorium reactors? But that’ll also take some time for the sentiment to change for the “loud majority” of people banging on about solar/wind to realise it is not even close to being a solution.

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How about the mini nuclear reactors proposed in the uk by Rolls Royce?

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I don’t know much about them except some things I’ve read on news.
AFAIK conceptually what RR is suggesting is still same old nuclear power just smaller, “so we can iterate on build processes and improve efficiency/costs”

I don’t have a problem with neither the “small” nor the “big” uranium reactors, which are the only road to a carbon neutral world. Having said that, all uranium reactors will still have “hey what about Chernobyl?” effect.

Funny thing is thorium reactors are not science fiction, they are rather possible but needs huge investment until “we crack the code”

If there is a breakthrough in thorium reactors, which will be a complete game changer and solve our energy problems for any foreseeable future. (until we are advanced enough harvest solar energy by building a dyson sphere) but there is virtually no work is done towards this, as it is sorely expensive, and no private company will experiment in such a risky task.

I wish Germany and some other major EU states were investing in R&D over this, rather than burning their money on solar panels, that’ll contribute nothing to the energy solution for a couple of years (a decade? 2 decades) before ending up in landfill.

but solar panels gets votes, nuclear is evil these days so… :man_shrugging:

edit: maan, I’m so bad at writing, read my post again and it’s all over the place :slight_smile: :woman_shrugging:

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I hear General Electric and Lockheed Martin are working on mini reactors. (Lockheed is going straight for mini Fusion reactors not fission)

Well GE hitachi already have offerings on the market although it’s a small ‘modular fission reactor’

‘GE Hitachi offers the BWRX-300, a small modular reactor designed to be cost-competitive with other forms of generation, the sodium cooled PRISM, and the ESBWR and ABWR. In 2020, GEH and TerraPower introduced the Natrium™ power production and storage system.’

I also think General Electric is shaping up to be a great investment. Wind turbines, gas turbines and reactors, along with their jet engine business

Disclosure I’m Long Lockheed but not General Electric. Might in the future but I already have a lot of companies

I do some lobbying for many of the companies in this sector, so may be able to offer some insight. As I understand it, SMRs are at a very early stage and I would suggest the potential market’s relatively limited. Investment in offshore wind and hydrogen will dwarf it over the next decade. There’s still a lot of stigma attached to the word ‘nuclear’ and it carries a high political risk too.

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Tekmar Group, they’ll do well out of wind, I hope :wink: