Shell vs Chevron Which Should You Buy?

Shell and Chevron are two major players in the oil and gas industry, both offering investment opportunities through their stocks. Shell, a multinational company based in the Netherlands, has a long history of providing solid returns to shareholders. Meanwhile, Chevron, a US-based corporation, has a reputation for stability and consistent growth. Investors must weigh factors such as financial performance, market trends, and geopolitical risks when deciding between investing in Shell or Chevron stocks.

Shell or Chevron?

When comparing Shell and Chevron, 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 Chevron.

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 4.33%, while Chevron has a dividend yield of 4.24%. 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, Chevron reports a 5-year dividend growth of 6.16% year and a payout ratio of 70.19%.

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 12.71 and Chevron's P/E ratio at 16.61. 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 1.06 while Chevron's P/B ratio is 1.77.

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 0.00%, while Chevron's is 0.25%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Shell's ROE at 8.38% and Chevron's ROE at 10.47%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $63.44 for Shell and $153.08 for Chevron. Over the past year, Shell's prices ranged from $60.34 to $74.61, with a yearly change of 23.65%. Chevron's prices fluctuated between $135.37 and $167.11, with a yearly change of 23.45%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.