Shell vs Bharat Petroleum Which Is a Better Investment?

Shell and Bharat Petroleum are two well-known companies in the oil and gas industry, with both having a strong presence in the global market. Shell, a multinational corporation based in the Netherlands, has a long history of providing energy products and services to customers worldwide. On the other hand, Bharat Petroleum, a state-owned company in India, is known for its refining and marketing operations in the domestic market. Investors often compare the performance of these two stocks to determine which could potentially offer better returns.

Shell or Bharat Petroleum?

When comparing Shell and Bharat Petroleum, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Shell and Bharat Petroleum.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Shell has a dividend yield of 4.08%, while Bharat Petroleum has a dividend yield of 10.08%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Shell reports a 5-year dividend growth of -8.03% year and a payout ratio of 55.99%. On the other hand, Bharat Petroleum reports a 5-year dividend growth of 3.55% year and a payout ratio of 0.00%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Shell P/E ratio at 13.37 and Bharat Petroleum's P/E ratio at 10.18. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Shell P/B ratio is 1.11 while Bharat Petroleum's P/B ratio is 1.73.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Shell has seen a 5-year revenue growth of -0.04%, while Bharat Petroleum's is 0.40%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Shell's ROE at 8.38% and Bharat Petroleum's ROE at 17.52%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $66.34 for Shell and ₹304.05 for Bharat Petroleum. Over the past year, Shell's prices ranged from $60.34 to $74.61, with a yearly change of 23.65%. Bharat Petroleum's prices fluctuated between ₹191.75 and ₹376.00, with a yearly change of 96.09%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.